The conclusion was that in a very loose monetary environment, arbitrage behavior would weaken the effects of window guidance. On the other hand, monetary policy on its own could not complete the job. It would become more effective when monetary policy and micro-prudential policies are used in a complimentary fashion.
3 Challenges in leaning against the wind I do acknowledge that there are also challenges even if we were to agree that central banks should lean against the wind. What conditions need to be fulfilled so that the central bank can effectively lean against the wind?