As the height of the credit boom, the size of the shadow banking system in USA was roughly twice as large as the banking sector and is still 25 per cent larger. In several other advanced countries including Canada, the sector is at least as large as the banking sector.
The output gap we acknowledge by our forward guidance: Interest rates will remain at the present level, or even lower, over a longer period of time and well into the recovery. WSJ: The U.S. central bank has reacted more aggressively to disinflation risks. Is the ECB being complacent? Even by your own forecasts inflation will only be 1.7% by the end of 2016.