An article in the Monetary Policy Report published in July 2013 presents a conceptual framework for taking into account financial imbalances in the monetary policy assessment. 3  For a review and categorisation of various points of view on the question of how monetary policy should give consideration to financial stability, see Smets, Frank (2013). 4  See Svensson (2011). 5  In Canada, inflation has also been below the target for a period of time, but before this situation arose, unemployment had fallen back to its pre-crisis average. New Zealand had an inflation rate in the lower end of its target interval of 1–3 per cent during a few quarters before they began to say in early 2013 that they did not want to see increased financial stability risks as a result of developments in the housing market. They have not, however, expressly spoken of a trade-off between bringing up inflation and subduing developments in the  2  BIS central bankers’ speeches  The situation in Norway has been similar to ours, in that inflation has also been clearly below the target for a relatively long time, from the beginning of 2011 until the middle of 2013. Since spring 2010, Norges Bank has often discussed the build-up of imbalances linked to a low interest rate as a factor that is included in its monetary policy deliberations. But there are clear differences here, too. Throughout this period they have had a resource utilisation that was close to or even above the normal level.
We have also seen some peaks in transaction volumes as well as more frequent and higher margin calls. Furthermore, many infrastructures have had to cope with the default of a major participant, notably in the context of the demise of Lehman Brothers in September 2008 and the corresponding spill-over effects on its subsidiaries. Fortunately, EU market infrastructures were able effectively to overcome these challenges without any major operational disruptions. In particular, the Eurosystem’s TARGET system – which is not only the backbone of the large-value payment infrastructure for the euro, but also plays a central role in providing settlement services for 36 retail payment systems and 33 securities settlement systems that are connected as ancillary systems – has proven to be  BIS Review 74/2009  1  stable and resilient. Nonetheless, I would like to mention three key stylised facts which illustrate the impact of the current turmoil: First, the values processed in TARGET in the last quarter of 2008 showed an unusually high increase of 13% compared to the first three quarters (see Chart 1). When looking at the average values settled in different time bands during the day, the main difference between the third and the fourth quarter of 2008 relates to the values settled in the last hour of operations.