A framework for assessing monetary policy and financial stability Today, the financial system is more resilient and the global economy is enjoying a period of strong economic growth. However, important challenges remain for both monetary and regulatory policymakers. A framework I consider very useful for guiding policy actions is based on the following three key elements7: Firstly, the necessity of policies.
Do circumstances require action by authorities? Secondly, the effectiveness of the instrument. Can the proposed policies achieve the intended objectives? And thirdly, the possible unintended consequences of interventions. In my view, both monetary and regulatory policies need to be based on such criteria as guideposts for policymaking. 4.