The Federal Reserve Chair Janet Yellen was speaking at an inaugural central banking lecture at the IMF in Washington:
- There is no need to change monetary policy to address financial stability concerns;
- She sees "pockets of increased risk-taking across the financial system";
- "Efforts to promote financial stability through adjustments in interest rates would increase the volatility of inflation and employment";
- The monetary policy should focus on jobs and inflation;
- "Monetary policy faces significant limitations as a tool to promote financial stability";
- The crisis would not have been prevented or significantly mitigated by substantially tighter monetary policy in the mid-2000s.
The transcript of the whole speech by Janet Yellen can be found here.