Shareholders – and in some cases bondholders as well – must be asked to shoulder some of the losses in difficult times; among other things this would strengthen both market discipline and investor scrutiny of management decisions.
As I mentioned previously, movements in currencies could reflect current challenges in the operation of the international monetary system, which may result in the displacement of adjustment pressures onto a handful of currencies. Whatever happens, the Bank retains considerable flexibility in the conduct of monetary policy at low interest rates, consistent with the framework that we outlined in our April Monetary Policy Report.