Banks should eschew the tendency to treat compliance merely as cost and should recognise that proper conduct saves the bank from possible reputational loss and penalties – thus, generates hidden earnings which most banks do not quantify, and hence do not realise. A poor compliance culture may lead to heavy costs to the banks.
See Haldane (1995) for descriptions of the policy frameworks of those countries using inflation targeting as the basis of their policy. For a discussion of the uncertainty surrounding the transmission mechanism, see Thiessen (1995).