This thematic study note reviews a debate that re-emerged in the wake of the 2008 financial crisis between, on one side, the proponents of a more active role for monetary policy, going beyond its fundamental objective of price stability to address financial stability, and, on the other side, those in favor of orthodoxy. Thus, the debate opposes two strategic visions: "Leaning against the wind" and "Cleaning up afterwards".

The "Leaning against the wind" strategy advocates a focus on the goal of financial stability and suggests sailing against the current of the financial cycle to prevent the formation of financial bubbles. It consists of direct intervention by monetary authorities to slow down the expansionary phase of the financial cycle, in a bid to limit the economic impact of increased financial market volatility, debts, and excessive risk-taking by banks. With this end in mind, setting key interest rates higher (than required to meet inflation targets and stabilize the real economy) would help control the formation of such bubbles.

The "cleaning up afterwards" strategy, on the other hand, is aligned with the conventional view of monetary policy. As such, it does not include financial stability concerns in monetary policy implementation, although it does leave open the option of taking action, as needed and on a one-off basis, to reduce the spread of the impact of a financial crisis to the wider economy. The concept of "cleaning up afterwards" is predicated on the idea that "price stability is a sufficient condition for financial stability".

According to that vision, central banks would do well to focus on their price stability and production support goals. This monetary policy vision is inherited from the consensus that emerged from the 2002 Economic Symposium in Jackson Hole, Wyoming, where central banks agreed that pursuing price stability should remain their priority.