I find the following passage particularly interesting:
[...] also from a monetary policy perspective, greater emphasis on “ex-ante” prevention is warranted. To the extent that financial imbalances are accompanied by excessive monetary and credit growth with possible implications for the medium term outlook on inflation, central banks do indeed have an obligation to take appropriate action. With respect to the ECB, our focus on medium term definitions of price stability, as well as the use of money and credit in our monetary pillar, already provides some ‘leaning’ against the build up of asset price imbalances. Therefore, in my view, a cautious leaning against excessive money and credit growth and building up of financial imbalances as part of our general monetary policy framework cannot only contribute to financial stability, but most importantly to achieve our primary objective of maintaining price stability.This line of arguing closely resembles the ideas brought foward in the excellent report of Eichengreen and others (see my recent post). It seems that we are heading towards a post-crisis consensus...
