Early action works best both because monetary policy works with a lag and because developing problems (such as rising inflation) may often be defused at lower cost in their early stages.
This oversight framework was formalised in 2004 through the establishment of the Oversight Group. The ECB participates in this Group, which is led by the National Bank of Belgium (NBB). The ECB’s involvement in the oversight of payment and clearing systems is based on its role, under the EC Treaty, “to promote the smooth operation of payment systems”.