The effect of regulatory reforms since the GFC Dear colleagues, Despite all the turmoil, the global financial system has got through the immediate shock, preventing a health crisis from turning into a systemic financial crisis. This is in part due to the international regulatory reforms implemented over the past decade.
When strong demand pushes the economy against the limits of its capacity and threatens to raise future inflation above the target, the Bank will raise interest rates to cool off the economy and mitigate those inflation pressures. When demand is weak, as we saw in 2001, future inflation is likely to ease.