In other instances, inflation had already been kept low and stable for some time, and the adoption of an explicit inflation objective followed from extensive research and debate on issues such as the benefits of low and stable inflation, the presence of biases in the measurement of inflation, and the importance of central bank communications.
Again it is very difficult to isolate the banking sector from capital movements, but the authorities can demand large capital requirements. Authorities could also supervise the currency mismatches in the banking sector properly. More capital and less foreign currency liabilities might render the economies less vulnerable to sudden capital movements and crises. 2  BIS Review 72/2004