Fourth, monetary policy has a medium-term orientation, given the long and variable lags of the monetary transmission mechanism. Fifth, monetary policy is underpinned by a comprehensive analytical framework, which rests on two pillars: the economic analysis and the monetary analysis. I should note that the crisis has shown how the monetary analysis can play an important role in signalling financial imbalances and vulnerabilities.
It is an important input in a strategy of “leaning against the wind”. Finally, monetary policy follows a so-called “Separation principle”, which distinguishes decisions about the monetary stance aimed at achieving price stability from tools directed at implementing monetary policy decisions through liquidity management. With these principles in mind, let me turn to the monetary policy responses to the crisis.