Further, the framework has built-in flexibility with respect to the amount of time it takes to return inflation to target after a shock. Years of successful inflation targeting have given the Bank the credibility to use this flexibility during periods of economic stress. A flexible exchange rate is also key to achieving our inflation targets over time.
The Expert Group that I chaired saw the need to simplify the structure of large and complex banks to shield the deposit-taking bank from an excessive risk-taking in trading activity, to facilitate monitoring and supervision of these banks and to make the recovery and resolution measures easier to impose.