Communication is more an art than a science. We will certainly try to learn from experience. Verbal discipline and transparency are not contradictions: they should be two sides of the same coin. We aim to be predictable. This will be easier if we can predict how the media will interpret and publish our communications. This is not yet always the case.
In fact, we can see a remarkable resemblance in the development of the financial crises and subsequent policy responses between the current US situation and Japan’s lost decade. Chart 1 shows a rough mapping of events in the time line between the current US crisis and Japan’s lost decade. In both countries, the problem had its root cause in the property markets.