However, there is a close relationship between monetary policy and the stability of the financial system. To begin with, monetary policy has a substantial impact not only on price stability but also on financial system stability through its effects on financial intermediation and various asset prices.
You may well have built your reputations and institutions through responsible lending and community-focused operations, but nonetheless, you now find yourselves facing higher deposit insurance assessments and increasing public skepticism about the behavior of bankers – outcomes that you perceive were largely caused by the actions of larger financial institutions. Many of you managed your businesses prudently and shunned more exotic instruments and activities.