Over the 10–15 years that preceded the crisis, it was already possible to identify a number of signals of macroeconomic stress, which interacted with financial system flaws to build up very significant, although at the time partly hidden, financial fragilities 1: –  the dramatic fall in US households’ saving rate, from around 7 percent in the early 1990s to close to zero in 2005–2007;  –  a very large increase in US and global liquidity, also reflecting the generally accommodating US monetary conditions;  –  the widening of global imbalances, recognised as unsustainable already in the late 1990s;  1  A more extensive discussion of these macroeconomic developments can be found in a previous paper presented this spring to a G20 Workshop (see I. Visco, “The global crisis: the role of policies and the international monetary system”, in G20 Workshop on the Global Economy, Macroeconomic causes of the crisis: Key lessons, Mumbai, India, 24–26 May 2009, pp.
As long as economic and price outlooks entail high uncertainty, it is impossible to specify the exact timing of an exit from monetary easing, but there is no uncertainty with regard to the Bank’s policy stance to pursue monetary easing until it sees the exit.