Next, I will discuss the various ways in which financial stability and financial inclusion complement each other, going on to discuss the ways that they may be in conflict and work at cross purposes.
There is no risk-free path for monetary policy. The biggest risk of tightening too early or too fast is that the economy may weaken more than expected, forcing the central bank to reverse course. The record of central banks lifting off from the zero lower bound suggests caution in this regard.