BIS Review 48/2002  3  So, at the risk of oversimplifying, let me now turn to consider two general principles of prudent monetary governance which may help central banks to reconcile the need for prompt action and a firm medium-term orientation.
First, a central bank always needs to tailor action upon the origin, the magnitude and the nature of the shocks which hit the economy from time to time. As I tried to argue above, this is a highly demanding exercise, because shocks do not come about with labels: they have to be identified first, in real time.