Central bank tightening: what could break?
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The ECB's New Monetary Policy Strategy - Financial Stability
Former vice president of the European Central Bank, Victor Constancio, has always been opposed to the idea that monetary policy should respond to financial stability concerns. He still stands by that view. In 2018, proposals were in the air to we should increase interest rates in order to contain the buoyancy of the asset prices. And I was against that. The irony of things is that now we have the opposite situation: instead of increasing rates, to tackle financial stability issues, it should be perhaps the opposite.
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