Consistent with its dual mandate to foster maximum sustainable employment and price stability, the Fed must therefore continue to respond aggressively to shocks that have potentially persistent adverse effects on both inflation and real activity. And we need to monitor long-run inflation expectations closely to avoid losing credibility with the markets.
As the final resting place of risk is hard to observe, as regulators, we can at least try, through this collaboration, to track its passage through the markets. There are, therefore, compelling reasons for both authorities to  BIS Review 81/2007  1  strengthen collaboration with a view to improving the sharing of information relevant to their respective responsibilities.