Liquidity has been appropriate, as money supply and credit growth were clearly favourable to economic expansion. Monetary policy cannot be made responsible for the present weak economic conditions when the level of interest rates has been the lowest for decades. In our case, we have to go back 45 years to find interbank market rates similar to the ones now prevailing.
BIS Review 47/2003  1  I stress this point not to contradict the idea that the best way for monetary policy to contribute to longterm growth is by ensuring an economic climate of price stability. It is well known that monetary policy is not able to directly affect the level or growth of potential output.