Central Banks Hitting Asset Bubbles Show No Faith in Greenspan

During the days when Alan Greenspan was the Fed Chairman, he noted that monetary policy is a blunt instrument to regulate asset prices. What he possibly meant with that statement is that one would find it difficult to deflate asset bubbles by increasing interest rates. However, with the financial crisis fresh in the public's mind, central bankers are now looking at interest rates as a means to regulate asset prices. A new era has dawn upon us where central bankers would need to study the valuation of the assets within its borders and decide on the appropriate level of interest rates.