interest rates sharp enough to materially slow the whole economy. in short, we cannot practice “ safe popping, ” at least not with the blunt tool of monetary policy. the situation is further complicated if, as is usually the case, the suspected bubble affects only a specific class of assets, such as high - tech stocks. certainly there is no way to direct the effects of monetary policy at a single class of assets while leaving other financial markets and the broader economy untouched. one might as well try to perform brain surgery with a sledgehammer. the problem of safe popping applies with double force to the aggressive bubble - popping strategy. a truly vigorous attempt by a central bank to rein in a supposed speculative bubble may well succeed but only at the risk of throttling a legitimate economic boom or, worse, throwing the whole economy into depression. rather than discuss this point further in the abstract, let me give a concrete historical example : the role of federal reserve policy at the onset of the great depression in the united states. an historical example : federal reserve policy in the 1920s the u. s. experience of the 1920s illustrates many of the points i have been making. as you know, the “ roaring twenties ” was a prosperous decade, characterized by extensive innovation in technology and in business practices, rapid growth, american economic dominance, and general high spirits. stock prices rose accordingly. as early as the mid - 1920s, however, various policymakers and commentators expressed concern about the rapidly rising stock market and sought so - called corrective action by the federal reserve. the corrective action was not forthcoming, however. according to some authors, this was in large part because of the influence of benjamin strong, long - time governor of the federal reserve bank of new york and america ’ s pre - eminent central banker of that era. strong resisted attempts to aim monetary policy at the stock market, arguing that raising interest rates sufficiently to slow the market would have highly adverse effects on the rest of the economy. “ some of our critics damn us vigorously and constantly for not tackling stock speculations, ” strong wrote about the debate. “ i am wondering what will be the consequences of such a policy if it is undertaken and who will assume responsibility for it. ” however, strong died from tuberculosis early in 1928, and the fed passed into the control of a coterie of aggressive bubble - poppers, of whom the most determined was probably board governor adolph miller. miller was supported in his objective by another fervent

##minants driving the two, but also the banks ’ vision on the future developments. very often, as policymakers, we go beyond the aggregate results and screen the results of the survey either by observing individual banks data, or data by group of banks ( large, medium, small ), as their behavior might differ significantly and can “ be lost under the mask of the average ”. this helps in better understanding the monetary policy shocks of different types of financial institutions ( small / large, foreign / domestic, across different business models ). credit registry established in 1998 that provides a loan – by - loan data appears to be very useful tool for financial stability and monetary policy purposes. the recent crisis has emphasized that despite the fact that there is a vast data on credit available, still more granular, frequent and flexible credit data is needed. though this is mainly for the purpose of credit risk assessment and financial stability issues, to which i will refer later, the availability of loan - by - loan data and their characteristics allows for more profound monetary policy research. in particular, the individual loan - by - loan data can be utilized for instance, for exploring the risk - taking monetary policy channel, which has been on the margin of the research. further, data from the credit registry allowed us to investigate where are the credit flows channeled – to what extent it supports the sme segment, which is a key segment in reviving the growth and boosting employment, to what extent it is channeled to non - tradable sector creating possible bubbles down the road. of course, the banking system is only one sequence of the monetary policy transmission mechanism. the corporates and households are the other very important part, whose behavior affects the outcome of the undertaken monetary policy measures. as a first line of policymaking, we surely still rely on stylized macro models, where we strive to estimate or calibrate the average behavior of the economy, or the behavior of representative agents. of course, the reality can be much more different and heterogeneity much more pronounced than envisaged. this is why in the more recent period, as a central bank, we strive to gather as much as possible micro information, for the corporate sector in particular. one of the important steps was the launch of the first survey on wage and price dynamics, similar to the survey conveyed for the euro area, which provided one of the most comprehensive overviews on the behavior of corporates in terms of wage and price adjustments.