We will also remain vigilant of financial institutions to best ensure they do not promote undue risk taking. And we are continuously assessing our prudential policy settings to bolster the conduct and culture conducive to long-term financial stability. Consistently below target inflation has its own unique challenges that are best avoided.
For example, persistently low inflation can further reduce inflation expectations – leading to even lower actual inflation in the future. At an extreme, a falling general level of prices can significantly hinder economic activity as people delay their spending in the belief that things 7 See Principles for Monetary Policy  8  will forever be cheaper in the future.