Central banks and others that might be involved in crisis management must take steps to push back the frontiers of the “unknown” before a crisis hits and to develop procedures for obtaining the “knowable” quickly when needed. More information is not just a “nice to have.” Policymakers want to choose the path with the lowest moral hazard consequences.
But they are in a difficult position in a crisis. The costs of not acting forcefully enough will be immediate and obvious - additional disruption to financial markets and the economy.