10 Recent events have forced a re-evaluation of such models in the research community. It seems to me that the ECB’s approach has been vindicated by the financial crisis. The importance of monitoring money and credit developments is becoming more recognised in both the academic literature and the policy debate.
Indeed, leading academics have argued in favour of defining and monitoring new monetary indicators to detect the build-up of leverage within the financial sector. 11 Of course, recognising the importance of monetary analysis is not a panacea.