And the mistaken call would have reduced welfare by needlessly inducing fluctuations in the macroeconomy. Timing is also an issue. Let us suppose that the evidence is so compelling that policymakers become fairly confident that valuations are excessively rich.
Furthermore, with a view to facilitating corporate financing, the Bank has expanded the range of corporate bonds and loans on deeds it accepts as eligible collateral and has decided to introduce a new operation through which financial institutions can borrow low-interest funds from the Bank against corporate debt.