Five years ago, the global economy was emerging from the Asian and Russian financial crises, and the near-collapse of Long-Term Capital Management. During these events, we saw that financial markets are a key channel through which crises can spread. And among the countries most affected, we saw that one common element was a weak banking system.
The commitment was not unconditional, however. There was a clear, if implicit, understanding that, if the state of the macroeconomy and the inflation outlook were to change materially, the central bank would respond appropriately.