However, when banks are trying to de-leverage, such additional reserves are more likely to be hoarded. That appears to be what happened during the Japanese experiment with quantitative easing in the early part of this decade and a similar response is to be expected from banks at the current juncture. The initial responses in the United Kingdom to these measures have been moderately encouraging. Government bond yields fell significantly on the commencement of the programme of asset purchases, and yields appear to be some 50-75 basis points lower than they would otherwise be. And there are also signs of beneficial effects on conditions in the relevant corporate credit markets. Meier (2009) provides a fuller assessment. But it is very early to draw conclusions on the efficacy of these measures, as the transmission lags  11  14  Andres, Lopez-Salido and Nelson (2004) is a rare recent contributions in this tradition. BIS Review 101/2009  through to nominal spending are likely to be quite long. Moreover, even in some years time, it will still be difficult to draw firm conclusions, as the counterfactual is bound to be uncertain. But it will certainly provide fertile ground for future PhD theses. Let me turn now to the lessons from the crisis regarding the conduct of monetary policy in the future. In the run-up to the crisis, there was a lively debate regarding the right way to respond to rapid credit growth and rising asset prices.
Nevertheless, in the case of Thailand after the crisis, the banking system has not yet been fully functioned and this, to a certain extent, undermined the effectiveness of the monetary policy. The macro-model gives a range of core inflations with probability distribution being described into a fanchart. This fanchart takes into account the related uncertainties and gives some flexibility in a range of forecasts. Based on the most likely outcome, the MPC will announce the expected rate of inflation for this year and next year. According to the most recent assessment, the core inflation will be 0.5-1 percent in 2002 and 0.5-1.5 percent in 2003, providing growth of between 3-4 percent in 2002 and 2003. Finally to enhance transparency of the process, Inflation Report is published on the quarterly basis providing forecasts of inflation and economic growth for the next eight quarters along with the quarterly press release. For the final part of my talk, I would like to dwell on the issues of Central Bank Independence. The first issue is whether a Central Bank can have too much independence in the sense that it can be harmful. To this, I incline to say yes, but only in a rare circumstance. Bad decisions relating to monetary or financial institutions operations can be damaging with wide impact. To prevent this from happening, a mechanism should be installed such as a Monetary Policy Committee or a Financial Institutions Policy Committee comprising of qualified external directors so that important policy measures are made through group decisions.