There are costs to all other borrowers through the impact on secured lending pricing together with financial stability risks where this security is undermined. In other words, the high level of non-performing mortgage loans continues to affect the functioning of the Irish mortgage market today.
So over some time horizon, potentially quite long, the inflation target and financial stability are aligned. But translating this into monetary policy implications over a shorter time horizon is a large challenge, which still seems to me to be far from resolved. What about alternative regimes?