Evans, Charles
I agree that the severity of the recent crisis argues against simply waiting and mopping up after the fact if and when the prices of some assets do collapse. But the type of proactive response by a central bank that I envision is not well captured by the expression "leaning against a bubble." I prefer to see policy reacting to apparent exuberance in asset markets and the problematic risk exposure this could create, rather than initiating action out of a strong conviction that these particular assets are overvalued. In addition, the expression "leaning against a bubble" evokes polices that are aimed at achieving some targeted decline in asset prices. In contrast, I view the goal of intervention as insuring that exuberance in asset markets does not ultimately threaten the financial system or contribute to financial distress.
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At this point, I think that regulatory policy provides the most promise. For one, it is important to improve resolution procedures for financial institutions in the event of insolvency...
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At the same time, maintaining financial stability is also likely to involve more-proactive ... policies that vary with economic conditions. For example, when faced by several indications that asset markets may be exuberant, we might consider increasing capital requirements...
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I should note that some policymakers have recently expressed openness to the notion of leaning against bubbles. The proposals I just outlined are not out of scope with some of their thinking. This is because they, too, often give regulatory policy a prominent role