Consequently, with explicit focus on price stability, central banks were able to anchor inflationary expectations and gain credibility. On the back of robust growth, there was “benign neglect” of credit market excesses and asset price booms. The pre-crisis view largely favoured that asset markets were efficient at distributing and pricing risk.
2  BIS Review 120/2007  euro area, where regional monetary and exchange rate policies are options that are no longer available, it is important to make sure that other shock adjustment mechanisms function properly.