In the case of the Eurosystem, two examples come to mind: the 2/4  BIS central bankers' speeches  tiering system and TLTROs. The tiering system was introduced after the deposit facility rate was pushed in negative territory, to offset the negative side effects of low-for-long interest rates for banks intermediation. In the case of the TLTROs, we have excluded housing loans from the lending benchmark to avoid contributing to a potential housing bubble. So far, I have mentioned adjustments to our individual instruments; but more generally, our monetary policy tools could be combined with each other so that they maximise their impact on inflation while minimising the side effects on financial stability.4 Indeed this is precisely what the old Tinbergen rule asserts: we now have several instruments in our monetary policy toolkit, allowing us to reach several goals. III. Economic stability Let me now turn to economic stability. The stabilisation of the business cycle is the area of policy trade-offs and dilemmas par excellence. As long as price dynamics are in line with the business cycle, monetary policy is counter-cyclical. Fortunately, this is the case most of the time, as demand shocks tend to prevail. That said, monetary policy is not the only stabilisation policy: fiscal policy is also very active, which raises the very topical issue of the congruence between monetary and fiscal policies. As long as inflation prospects remain too low with respect to the central bank’s inflation objective, accommodative monetary and fiscal policies can be congruent without any formal coordination.

Financial stability Lessons have to be fully drawn from the past experiences about the obvious costs of financial crises. History has shown that price stability is not a sufficient condition to ensure financial stability. Furthermore, low-for-long interest rates, in a context of a decreasing natural rate of interest, can contribute to the build-up of systemic risk and financial vulnerabilities, by encouraging excessive risk-taking and financial misalignments.2This matters for monetary policy. Of course, macroprudential policy is the first and main line of defence, and the toolkit has been considerably enhanced in recent years.3 However, it appears that macroprudential tools, although necessary, are not completely sufficient to address the whole range of financial stability concerns. It is my view that central banks should take financial stability into account while setting the course of monetary policy. There is a need to overcome the strict separation principle between monetary and macroprudential policies, and adopt a coordination principle. What does this mean in practice? Let me first dispel two misunderstandings and say what it is not about. It does not mean that financial stability may become a monetary policy objective in itself. The aim here would be to identify vulnerabilities that represent a threat to the price stability objective, either directly or indirectly by impairing the effective transmission of monetary policy in the medium-long term. Also, it does not imply a systematic (mechanical) reaction to financial stability indicators, and it is very different from the “leaning against the wind” strategy.