In other words, we weren’t content to just stand on the sidelines and wait to clean up messes. The widespread and extremely high cost of the Great Recession made it clear just how difficult the clean-up job can be.
It has been roughly seven years since the crisis, and the damage done to the global economy has left many central banks still struggling with weak growth and inflation. However, the more fundamental lesson we learned is that “lean versus clean” is a false dichotomy. It’s far too simplistic to say that financial stability threats compel central banks to choose between leaning and cleaning.