In order to manage this trade-off, the responsibility for macroprudential policies will in future be shared between the centre (the Single Supervisory Mechanism for the euro area and the ESRB for the entire EU) and the Member States (the national macro-prudential authorities). In sum, there are many uncertainties associated with the ability of both monetary and macroprudential policies to rein in the financial cycle.
As a policy maker, being confronted with a lot of uncertainty is not new. It is, however, important to acknowledge those uncertainties and draw the necessary implications. First, central banks should continue to focus primarily on what they can and are mandated to achieve, which is price stability over the medium term.