Traditional accounting standards have not kept pace with the riskmanagement tools employed by sophisticated corporations. Thus, more meaningful disclosure of firms’ risk-management positions and strategies is crucial for improving corporate transparency for market participants.
In parallel, an eye on capacity utilisation and the extent of unutilised resources can help reinforce our confidence in inflation convergence as a more robust real economy is likely to support a build-up of broad-based price pressures looking forward. Our third criterion, resilience, measures the robustness of inflation convergence to a partial withdrawal of monetary policy accommodation.