In the same vein, when the ECB decided in late 2005 to start increasing its policy rates again, it was mainly because our monetary analysis indicated upward risks to price stability. At the time, the signals from the economic analysis were rather mixed, and I remember that we were widely criticised for our decision.
In retrospect, I would say this decision appears to have been well-timed, given the strength of the economic upturn that followed from 2006 onwards. Finally, using signals from the monetary analysis, we continually reminded market participants during those times that risk premia in financial markets were extraordinarily low and that the strong growth in credit aggregates implied future risks to financial stability.