4  Making the financial system more efficient – the role of banks  The banks’ role as financial intermediaries has a major bearing on how efficiently the economy allocates its resources between competing uses.
For example, New Zealand, which had the first and the most tightly specified system, also had one of the poorest track records on inflation and therefore the clearest need to signal a regime shift. Notwithstanding these differences, the essentials -- a numerically specified target linked to procedures of public explanation and accountability -- are common to all the inflation targets.