We have enough evidence by now that interest rate policies can have effects on indebtedness, risk-taking (through maturity transformation,  Page 7 sur 11 search for yield, or other channels) and the profitability of financial actors. It would therefore be short-sighted to ignore the side effects of monetary policy on financial stability. Second, are these effects large enough to make it possible to preserve financial stability without compromising price stability? At this point, the precise terms of a possible trade-off are still being debated. xii The issues are complex: as Nuno Coimbra here at PSE emphasises in a paper with Hélène Rey, a decrease in interest rates can encourage risk-taking when interest rates are low, but discourage it when interest rates are high.xiii We need more work on this important issue. Let me just suggest two thoughts on this open issue. a/ Incorporating Financial Stability Concerns with an Extended Monetary Toolkit First, the binary opposition between the traditional separation principle and “leaning against the wind’’ makes less sense when monetary policy has itself several instruments at its disposal. A median way, which we could call “coordinated” or “integrated” is possible. Indeed, that several instruments can allow to pursue several objectives is just what the old Tinbergen rule asserts. This is particularly relevant within monetary policy in our current context. Over the past years we have brought innovations to our operational framework, and we have considerably extended our toolkit with balance-sheet policies such as quantitative easing and (T)LTROs.
19(2), pages 04-77 -Woodford (2018), Monetary Policy Analysis when Planning Horizons are Finite, NBER Working Paper No. 24692  i  I would particularly like to thank Matthieu Bussière, Stéphane Dupraz, Mark Deen, and Olivier Garnier for their help in preparing this speech. ii On the measurement of the natural rate of interest and the uncertainty surrounding its long-term component, see e.g. Holsten, Laubach and Williams (2017), Hamilton et al. (2019), and Brand, Bielecki and Penalver (2018). iii On the opportunity of relying on fiscal policy in a low-rate environment, see e.g. Blanchard (2019). iv On the issues surrounding the measurement of potential output and natural unemployment, see e.g. Orphanides and van Norden (2002), Coibion, Gorodnichenko and Ulate (2019) and Aiyar and Voigts (2019). v For early research on firms’ expectations, see e.g. Coibion, Gorodnichenko and Kumar (2018) and Coibion, Gorodnichenko and Ropele (2018). vi On the forward-guidance puzzle and possible solutions to it, see e.g. Del Negro, Giannoni and Patterson (2012), Nakamura, Steinsson and McKay (2016), Gabaix (2019), and Woodford (2018). vii See e.g. Bernanke, Kiley and Roberts (2019). viii Monnet (2014) and Monnet and Vari (2019), among others of his work. ix Stein (2013). x Protocol on the Statute of the Eurosystem and the ECB, Article 3.3. xi For recent historical accounts of the ECB’s monetary policy in general, and monetary pillar in particular, see Hartmann and Smets (2018) and Rostagno et al. (2019). Page 12 sur 11 xii  See Svensson (2017) and Ajello et al.