Additionally, we will focus on the banks’ treatment of nonperforming loans and on the transition to IFRS 9. And we will follow up on the implementation of the SSM stance on options and national discretions to monitor the banks’ quality of capital. With regard to methodology, we plan to develop our SREP methodology for liquidity risk.
What I have just outlined, and rejected, are the strictest forms of rule-based guidance for the Federal Reserve. Strict inflation targeting and other rule-based approaches are ideas put forward by some central bank observers. However, a more nuanced proposal has emerged more recently, known as flexible inflation targeting.