Jeremy Stein, a Fed governor who is resigning
next month, told an International Monetary Fund forum there is a
need "in principle" to incorporate the aim of financial
stability into monetary policies. Less clear, he said, is how to
"operationally" incorporate it into policy.
Stein has pushed this idea for more than a year. It runs against
the traditional concept of adjusting interest rates to target
inflation and unemployment, and separately, using regulation and
supervision to ensure the financial sector is stable.
Turning to international financial stability, Stein said: "We
have to be aware of it, we have to monitor it ... this is where
communication is helpful and being attentive is helpful.
"Doing the right thing for the U.S. economy is ultimately
helpful for larger parts of the world," he added.
(Reporting by Jonathan Spicer and Leika Kihara;
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