Moreover, to some degree, central bank practice remains eclectic. At the Federal Reserve, both simple feedback and forecast-based approaches are used to provide information to policymakers.
And it is not just competition within the banking market which is playing a role. Technological progress is also creating competition entering the banking market from without. Take, for instance, new electronic payment systems or crowdfunding. These are putting external pressure on banks’ traditional business models. Banks need to respond and to adapt their business models and IT systems to the new environment.