It is a little bit as if they are telling us to forget about monetary policy in principle. Of course, the tools of monetary analysis can support an assessment of risks to financial stability. However, we cannot deny their intrinsic value for monetary policy by limiting their role to episodic and extreme events.
Of course, owing to their influence on financial stability risks, monetary trends impinge on the outlook for price stability, although not exclusively. The interaction between monetary trends and the macroeconomy is multifaceted. Not all historical episodes of private sector money and credit balances going off track have been followed by threats to financial stability.