BIS Review 12/2004  1  policy performed quite poorly, relative to both earlier and later periods (Romer and Romer, 2002).4 Few disagree that monetary policy has played a large part in stabilizing inflation, and so the fact that output volatility has declined in parallel with inflation volatility, both in the United States and abroad, suggests that monetary policy may have helped moderate the variability of output as well.
These have been incorporated into the Guidance as the standard for NPL management going forward. A central principle of the Guidance is ‘tone from the top’. The resolution of non-performing loans rests firmly with the institutions themselves. Management bodies must take full ownership of this problem. This includes the development, and approval of a strategy and operational plan to deliver the progress required.