The sampling approach generates the same entry and exit behavior as present in the population, with young individuals and immigrants entering the sample and deceased individuals and emigrants leaving the sample each quarter at the same rate as in the U.S. population. As a result, for each quarter starting in 1999, the panel constitutes a representative cross-section of the population of borrowers. Moreover, once the random sample of individuals is identified, we then include the credit records of all individuals living at the same address, so the panel can be used to analyze new loan originations, balances, and delinquencies at the household level. Consumer debt traditionally has been measured at the individual level, but most economic decision making is done at the household level. In fact, consumer income and assets are commonly measured and analyzed at the household level. For studying household economic behavior, and in particular for understanding life-cycle household finance, it would similarly be more useful to examine debt and credit aggregated at the household level. It may also be important to consider the distribution of debt within households. Beyond the ability to link individual consumer and household-level loans over time, the panel improves on typical loan-level datasets by linking multiple loans to the same consumer. Thus, at each point in time, one can see whether the individual holds multiple first mortgages or a combination of first and second mortgages while at the same time holding various types of non-mortgage debt.
A striking development, however, has been the progressive convergence of liquidity provision frameworks, even if  2  BIS Review 63/2008  technical modalities remain, and will remain, country-specific. There has been a general move towards a lengthening of maturities, a broader range of collateral and a wider list of counterparties. A clear and strong distinction has been preserved everywhere between liquidity provision, on the one hand, and monetary policy, on the other. In the euro area, the policy rate has been maintained unchanged, even if, at the same time, liquidity has been provided to the interbank market. Indeed, the bulk of liquidity injections since last August has been aimed at aligning the timing and maturity of the liquidity supply with a changing demand within the reserve maintenance periods, in order to stabilise the very short-term interest rate. As I have already pointed out, a standard result in economic theory (William Poole’s paper from 1970) states that, when demand for central bank money is uncertain, then it is optimal to stabilise the short-term interest rate, letting money supply adjust endogenously. We are, by no means, in totally safe territory. The conjunction of inflationary pressures and residual financial instability will prove, in times to come, very challenging for policy-makers. But we can rely on our experience and the lessons learned during the last few months to try and steer the world economy through its current troubles. BIS Review 63/2008  3