Credit Cycles: Past and Present.” (498 KB PDF) Note, however, that whereas this previous analysis focused on the evolution of credit following business-cycle peaks, staff analysis is now focused on the evolution of credit following business-cycle troughs. BIS Review 91/2010  7
Adding to the challenge is the fact that monetary policy operates on the economy with long and variable lags. Adjustments to the policy rate that we make now typically take four to six quarters to have their full effect on economic activity, and six to eight quarters to have their full effect on inflation (essentially two years).