The Governor of the Bank of England was criticized for his response to the Northern Rock on the floor of Parliament, where he was blamed of changing his position over a few days. In fact, financial markets are fast changing, and judgments must be made according to specific conditions. It’s normal for one’s conclusions to be updated within a few days.
From the perspective of the adjustment capabilities in dealing with the crisis, the key is to increase microeconomic flexibility. In other words, the adaptability of the micro entities to changes in prices as well as in market supply-demand should all be improved, thus avoiding the introduction of excess rigidity in pricing, supply, demand, and institutional design.