In extraordinary times, however, conditional guidance can be used to resolve time inconsistencies and achieve a better path for the economy. First, allow me to address the private sector use of guidance and its impact on the financial markets. Company disclosure An ongoing focus of regulators is ensuring that company disclosure is full, fair and timely.
The crisis demonstrated the need for better disclosure by financial institutions. Insufficient and inconsistent disclosure by financial institutions contributed to uncertainty and eroded market confidence. This led to a withdrawal of market liquidity, depressed valuations and increased funding pressures. Regulators and market participants are addressing these shortcomings. An Enhanced Disclosure Task Force was formed last May at the initiative of the Financial Stability Board.