Policy implications In view of these demand and supply factors, which have tended to work together to cause house prices to rise faster than income since 1995 in advanced countries, especially in urban areas, what are the implications for monetary policy and, perhaps more importantly, for financial stability policy?
Traditionally, central banking policy formulation has been associated with an element of secrecy, and for good reasons, a central bank was considered to be an arm of Government. Furthermore, financial markets and entities were tightly regulated and functioned the way regulators would like them to behave.