2  BIS Review 65/2006  Fourth, while competition in the domestic markets is in many ways, enhancing effectiveness of the monetary policy, the increasing integration of our financial sector with global markets is, arguably, making the monetary policy transmission somewhat more complex than before. My co-panellist Governor Axel Weber made a mention of this aspect in his intervention.
Apart from improvements in forecasting methodology, which is really a long-term process, there are immediate implications of this problem. One is to make better and more explicit assessments of alternative scenarios and then make policy decisions, taking into account the risks associated with different scenarios materializing. In effect, this is being done, but perhaps the communication strategy around it perhaps needs to be fine-tuned.