the need to simultaneously ensure price stability, financial stability and sustainable sovereign debt, which may not be possible if monetary policy accommodates on a sustained basis the needs of the financial systems and sovereigns. This trilemma is also faced in many emerging market economies, albeit in a somewhat different way.
These economies confront a much stronger inflationary environment and, therefore, the conflict between price stability and the other two objectives are much sharper. Theme of the Second International Research Conference (SIRC) and its relevance The pre-crisis policy environment was characterized by growing preference for separation of price stability centric monetary policy from financial stability and debt management, even though country practices varied.