In central banking, just as in business, it can take a long time to bring an idea to market; it took about a decade to develop the inflation-targeting regime that we adopted in 1991. Targeting inflation seems like an obvious choice today, now that it’s been replicated in all major advanced economies.
A key function of banks is to overcome such information and incentive problems by screening and monitoring borrowers. The credit  BIS Review 155/2009  1  channel is made up of two sub-channels. The first is the bank lending channel and works through the liability side of banks’ balance sheets, which in turn triggers certain adjustments on the asset side.