My remarks will focus on how central banks responded to recent challenges related to the conduct of both monetary policy and the promotion of financial stability and how, as a result of that experience, the analysis and execution of these two key functions may change.
According to this, monetary policy has a systematic impact on ex-ante risk-taking in the financial sector, by setting the universal price of leverage10, affecting financial conditions and ultimately the real economy.11 A prolonged period of loose monetary policy can contribute to the build-up of financial imbalances.