1. The recent experience showed that conventional policy framework may not always be sufficient to deal with crisis.
2. Therefore, central banks have to be flexible enough and innovative in their policy approach to respond promptly to the build-up of sectoral imbalances.
3. The dominant view during the pre-crisis period that one objective and one instrument as the best monetary policy framework has come under question during the crisis.
4. Experience in EMEs including India suggests that multiple indicators along with multiple instruments can work well not only during normal times but also during crisis.
5. While interest rate can continue as the dominant instrument for implementing monetary policy, supplementing it with other quantity or macro-prudential instruments even in normal times will not only enhance the flexibility of monetary policy to attain multiple objectives but also could obviate the risk of hitting the zero lower bound.
6. Post-crisis, there is emerging consensus that financial stability should be an objective of central banks but opinion remains divided as to what extent it can be considered as an additional objective of monetary policy.
7. Even while the weight of arguments tilts towards acceptance of financial stability as an objective of central bank or monetary policy, the key challenge is to evolve a consistent framework for implementation.