There are also other prescriptions regarding the quality of capital within the minimum total so that capital is able to absorb losses, and calling upon taxpayers to bear the burden of bail out becomes absolutely the last resort. 2  BIS central bankers’ speeches  16.
If a central bank adjusts the monetary policy stance only when second-round effects have become clearly visible, by relying on some measure of core inflation, its response will come too late and it is likely that a larger dose of monetary tightening would be required than would have been the case if it had adjusted earlier on the basis of its assessment of all pertinent risks to future headline inflation.