2  Kohn (2007), Svensson (2011b), and Woodford (2007) explain why forecast targeting is both a better way of conducting policy and a better description of actual policy than following an instrument rule such as the Taylor rule. 3  See Assenmascher-Wesche and Gerlach (2010), Bean (2009), Bean, Paustian, Penalver and Taylor (2010), Bernanke (2010), Dokko, Doyle, Kiley, Kim, Sherlund, Sim, and Van den Heuvel (2009), IMF (2009), and Kohn (2008, 2009). BIS central bankers’ speeches  3  is relevant for the forecast of inflation and resource utilisation, including the conduct of financial-stability policy when appropriate – remains in my view the best-practice monetary policy before, during, and after the financial crisis. Monetary policy and financial-stability policy are different This leads me to the more general question of what the relation between monetary policy and financial stability should be. For instance, it is sometimes said that the objectives of monetary policy should be expanded to include financial stability (Eichengreen, Rajan, and Prasad 2011, and Eichengreen et al. 2011). Such suggestions give the impression that monetary policy and financial stability are the same thing. But they are not. It is important to conceptually distinguish financial-stability policy from monetary policy and avoid conceptual and practical confusion between the two policies. Confusion risks leading to a poorer outcome for both policies and makes it more difficult to hold the policymakers accountable. Trying to use monetary policy to achieve financial stability leads to poorer outcomes for monetary policy and is an ineffective way to achieve and maintain financial stability.
Our goal is to promote a safe, sound, and stable banking and financial system that supports the growth and stability of the U.S. economy, and we will continue to strive to meet these responsibilities. Thank you very much for your attention this afternoon. I’d be happy to take some questions. 4  6  Forming the Next Generation of Bankers: The Future of Business Education and Ethics, Michael Strine, March 22, 2016. BIS central bankers’ speeches