The second crucial aspect is that conditions in financial markets in general, and financial stability considerations in particular, always need to be part of the overall assessment of economic conditions and the analysis of risks to price stability. This is an analytically challenging and very information-demanding exercise, in which central bankers have to be involved.
In this respect, a number of historical episodes have shown that financial instability can pose very difficult challenges to monetary policy. A much-debated specific case is the possible emergence of large misalignments in financial prices or asset price bubbles, a well-known symptom of imbalances in the financial system.