In most cases, the period of restructuring corresponds to a deflationary phase so that the central bank can ease monetary policy without worrying about inflation. However, if inflation raises its head before the restructuring has proceeded very far, the central bank may be in a position where it has to choose between price stabilization and maintaining an environment favorable to the restructuring process.
This is a dilemma for the central bank because either choice will have negative effects. If the central bank, for example, adopts a monetary-tightening stance to fight inflation, then the short-term profitability of companies and financial institutions will deteriorate, which may blunt the momentum for restructuring.