Leaving aside the obvious effects in crisis times, it is well known the impact of regulation and supervision on the development of financial markets and credit. Changes on the development of financial markets have a direct effect on the power of monetary policy. Changes in credit affect might affect consumption and therefore fiscal revenues.
The recent crisis has highlighted the potential effect of failure in regulation and supervision on the creation of asset price bubbles. If we add those “normal time” effects to the ones generated during times of stress, we have a clear case why both monetary and fiscal policy should be concerned with financial stability.