BuBa’s Fabritius: monetary policy can’t stop bubbles
Hans Fabritius, a member of the Bundesbank's Executive Board, has warned against the idea that it is mainly monetary policy's role to prevent the formation of bubbles and to guarantee financial stability.
Fabritius said such an extended mandate would overburden monetary policy. He said monetary policy had the policy rate as the only available instrument and it was therefore difficult to achieve two policy goals, price stability and financial stability. However, he also said monetary policy
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