The sudden unwinding of these imbalances set in motion the chain of events which we now call “the crisis”. Greater medium-term orientation in monetary policy frameworks would have made the events which followed less severe. Monetary data are critical as indicators of risks that are slow to appear elsewhere, for example, in inflation forecasts or in measures of output gaps.
Partly because they don’t speak the right language and regard the actual solutions as a black box; partly because they simply don’t bother. Unfortunately, incoherent concepts at the outset frequently lead to dirty fixes and workarounds, both of which turn out to be costly and inconvenient in the long run. And, frustratingly for ITexperts, it makes them look incompetent in the end.