Again, I would suggest that this will be a function of how money markets look after the crisis, in particular the extent to which longer-term interbank rates are affected by credit risk premiums. 4.
Financial stability considerations  Before the onset of the crisis, there were two main views about how central banks should deal with asset price bubbles.28 The first was that in setting interest rates, central banks should lean against large and sustained increases in asset prices, in particular housing prices.29 This view was based on evidence that booms, in particular those associated with rapid credit expansion, have tended to precede financial crashes, and the proposition that tighter monetary policy would reduce asset price and credit growth.