This does not mean that asset prices or debt have been given independent roles as target variables of monetary policy. The decisive factor has been the consideration of economic stability over time. A monetary policy that “leans against the wind” can entail costs in the form of lower demand and inflation in the short run. In the practical conduct of monetary policy, these costs must be weighed against the benefits. The main responsibility for counteracting financial imbalances cannot lie with monetary policy. If monetary policy seeks to pursue goals beyond its reach, the credibility of monetary policy will gradually weaken. Regulation and oversight of financial institutions must therefore continue to be the first line of defence against shocks to the financial system. In the proposal on a new central bank act, Norges Bank is given a clear responsibility for promoting financial stability. Norges Bank interprets the proposal to mean that the responsibility the Bank already has for promoting financial stability in a broad sense will be formalised. The Bank’s responsibility and work in this field have evolved over time, but the work on financial 5/8  BIS central bankers' speeches  stability has gained importance particularly after the financial crisis, as it has for other central banks. As noted in the Commission’s report, Norges Bank cannot alone ensure the “stability of the financial system”.
The order of priority for these considerations does not dictate the weight the central bank can give to stable output and employment in the short term. Norges Bank does not interpret “high and stable output and employment” to mean that the Commission is advocating that monetary policy should have greater responsibility for stabilising the economy than it does today. Monetary policy cannot have primary responsibility for the level of output and employment. There is broad consensus among economists that monetary policy cannot influence the long-term growth potential of the economy. The level of economic activity, and thereby employment, is a result of overall economic policy, particularly with regard to more structural factors such as wage and income formation, the tax and social security system and the functioning of the labour market. Monetary policy is only one piece of this picture. But monetary policy can make important contributions to stabilising the economy. First, the policy rate can be rapidly adjusted in response to shocks to the economy, as for example in 2008 and 2014. Second, the policy rate has a direct and pronounced impact on many segments of the real economy. This means that as long as there is no conflict with the inflation outlook, monetary policy can be oriented to influence average output and employment over time. Many countries, including Norway, have experienced that employment losses in connection with an economic downturn are not fully reversed following a turnaround; for example, unemployment may become entrenched at a high level or the labour force may be reduced.