In this approach, the costs of tightening monetary policy in response to a buildup of financial vulnerabilities are lower employment and potentially below target inflation in the near term. The benefits are possibly reducing the risk of a future financial crisis, an event likely associated with a much larger fall in employment and inflation.
To improve the availability of credit more broadly, we created a facility to support the issuance of securities backed by a range of assets including small business loans, auto loans, credit card receivables, student loans, and commercial real estate.