FAZ: But the fear is that the ECB is getting itself into a situation where it no longer has complete freedom to act. Trichet: We have full freedom to act, and we will never shy away from our responsibility for delivering medium-term price stability, also in difficult circumstances.
To quote from the paper, “central banks would find it difficult, (even ex post) to defend potentially unpopular measures, precisely because they succeeded in maintaining financial stability.” And any perceived failures on the financial stability front have the potential to undermine monetary policy independence through a general loss of credibility of the central bank.