We do not and should not play an active role in the functions of allocation and distribution4. At the same time, our operational framework has always included elements of what Goodfriend qualifies as credit policy. The ECB manages liquidity and steers money market rates by lending to banks in temporary credit operations against a broad range of collateral. Furthermore, we have always remunerated reserves.
Graph 2: Public and private sector debt  Over a longer time horizon, conflicts of interest between monetary policy and financial stability are less acute. If central banks act sufficiently early to address risks to inflation, this also limits risks to financial stability. If, however, central banks keep interest rates too low for too long, risks to financial stability build up over time.