Admittedly, a more conventional approach might have seen the Board ease policy more slowly, waiting for more evidence of economic weakness and moderation of inflation. Such an approach would have been defensible, particularly given how high inflation became during 2008. But the loss in economic activity would probably have been greater, and the risk of an even larger contraction would have been unaddressed.
It is an area where we are aiming to provide the sought-after guidance. But we are not writing a procedures manual for orderhandling. Rather we are articulating principles that need to be taken into account. Individual firms may then take these principles and reflect them in their own procedures manual.