So, in practice, central banks start with a formal framework that is consistent with certainty equivalence. We then apply judgment to account for the main sources of uncertainty considered to be missing from the framework. When monetary policy becomes asymmetric This leads me to my second observation.
Pre-emptively discarding innovation in the name of financial stability would certainly stifle innovation and inclusive progress, whilst depriving households of the benefit of technological progress. On the other hand, allowing risks to accumulate in an unregulated sector may undermine financial stability and undo the benefits of past regulatory efforts.