From the perspective of policymakers, a convincing approach would be one where the possibility of the bursting of a bubble is regarded as a risk factor for the conduct of monetary policy – rather than one where it is incorporated in the baseline scenario.
This is the basic concept behind the Bank's approach, where it assesses the baseline scenario, or the most likely outlook – the assessment from the "first perspective" – while assessing various risk factors and the cost that would be incurred should risks materialize – the assessment from the "second perspective."