Macro-prudential policies are the most appropriate instruments "to tame the financial sector in asset market segments showing signs of exuberance or where imbalances may be forming", according to Vitor Constâncio, European Central Bank vice-president.

Constâncio warned in a speech on February 13 at the Warwick Economics Summit  that monetary policy should be targeted solely at ensuring price stability in the market for goods and services. "It should not be used to address pockets of instability