Clearly, we wish the new rules to be constraining risk taking and leverage as the next boom approaches its peak, but that will probably be some years away, so we have time to implement strong standards and allow an appropriate period of transition. That said, there are three broad observations that I would like to offer.
To begin with, there are various technical advantages to the CPI, such as its high publication frequency, timely availability and transparency. The latter is reflected in its well-founded weighting scheme, which covers a considerable proportion of final spending, viz. household consumption. This makes the CPI a more attractive gauge than the broadest measure of inflation available, viz. the GDP deflator.