For instance, central banks might threaten future economic and financial stability if they keep policy rates too low for too long in the aftermath of a crisis.8 In the context of the present crisis, the risk of missing the right time to exit from unconventional monetary policy measures offers a case in point.
In the light of these insights, it should be clear that monetary policy cannot do it alone. Financial stability should mainly be pursued by microprudential and macroprudential policies.9 Also, in order to achieve price and financial stability a pairing of appropriate policies by all relevant authorities is indispensable.