The attainment of financial stability is heavily dependent on improved regulation and its effective implementation at both the domestic and international levels. The role of the audit profession in this process should not be underestimated. Thank you. BIS Review 109/2010  5
The Taylor rule is an interest rate feedback rule which aids in determining the short-term interest rate to achieve the twin objectives of stabilizing the economy and achieving price stability. The rule recommends that the short-term interest rate should be changed according to the deviation of inflation from its threshold or predetermined target and of output from its potential level.