In addition, perhaps one of the largest risks to the safety of the world banking system is the competitor - either local or cross-border - that erroneously evaluates risk, acts on that evaluation, and induces a competitive response that increases risk exposures broadly. For both reasons, action is imperative.
Experience shows that those central banks which have a successful track record of stability are most likely to enjoy credibility. Very broadly, such a successful track record is characterised over the long term by low inflation with very little fluctuation.