I wouldn't be a bank regulator if I neglected to mention that bank capital ratios remain very strong. Nearly 99 percent of banks in the United States are well-capitalized, which is a higher proportion than we have ever seen.
Up to now, I have discussed how certain limits in knowledge and forecasting ability have influenced the design of central banks’ strategies. I would now like to consider the other side of the matter, namely how does the choice of a certain strategy influence the forecasting exercises carried out at the respective central banks?