In contrast, an intermediate scheme – the monetary aggregate approach, combining a dose of flexibility (such as indicative inflation targets), with simple rules on the growth of money supply providing the adequate accountability by the policymakers – may gradually rebuild the credibility lost in the crisis without loosing the necessary discretion to address the contingencies inherent to this stage.
We definitely cannot “take shortcuts”: we need to develop and calibrate the instruments with capacity to stabilize cyclical fluctuations and, in turn, reduce macroeconomic risks. 2  BIS Review 75/2007  One of these tools is a deep domestic financial system and the capital market.