10  A term coined after the Fed’s interest rate cuts following stock market collapses. For an exposition of this view, see Greenspan (1999). 11  For example, Tarullo (2010) proposes the creation of an advisory committee that would assess macroprudential evaluations.
BIS Review 160/2010  5  Given the relationship between relevant interest rates and asset prices, the proponents of such a strategy argue that central banks can raise their policy interest rate to “prick” asset bubbles. It is widely known that monetary policy affects the general level of prices, at least in the long run, and that it may influence output only transitorily.