Likewise, some of our new instruments could be more efficient to address financial stability concerns. For instance, under some dimensions, balancesheet policies differ markedly from interest-rate policies. By providing valuable safe assets to banks – central bank reserves – a high level of central bank reserves can support their smooth functioning. Even more importantly, it can mitigate the risk that banks will try to supply the demand for safe assets by engineering them themselves. Privately issued safe assets are poor substitutes for public safe assets. xiv b/ Keeping the purchase of private assets to a minimum In any case – and this is my second remark – the purchase of private assets by the central bank should be kept to a minimum. Indeed, the asset-side of the balance-sheet – what assets the central bank buys with the reserves it issues – matters a lot. Buying an excessive amount of private assets such as corporate bonds could run the risk of distorting the signal that asset prices convey on the assets’ riskiness. The present compression of risk premia and credit spreads might already increase risks to financial stability. **  Page 9 sur 11 Conclusion I have restricted my remarks on financial stability to the policies that fall, at least in part, within the realm of a central bank. However, as I have emphasized earlier, monetary and prudential policies are not the only policies available.
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.