BoJ: downside to focusing on price stability alone

TOKYO: Focusing solely on ensuring price stability raises the risk of instability in the banking system, a senior official of the Bank of Japan said on Monday.

"If a central bank prioritises price stability only ... it magnifies the risk of financial system instability," BoJ Executive Director Masayoshi Amamiya said at a seminar hosted by the Nomura Research Institute.

How to pursue price stability and financial stability at the same time is likely to be the biggest challenge facing central banks of advanced economies for the time being, he said.