The original cause of the Icelandic crisis was a combination of inappropriate monetary policy and an outsized banking system.
The three key elements of this policy remained the adoption of a floating exchange rate system, the anchoring of monetary policy to the inflation target and the acceleration of banking sector reforms, he said.
Also, monetary policy liberalization and increased competition in the banking system will be key to improving credit and capital access for dynamic private companies.
Germany's low inflation rate, its limited room to ease monetary or fiscal policy and the problems in its banking system look horribly like the early symptoms seen in Japan in the mid-1990s before it sank into deflation.
Mr. Chidambaram also said that he expects the central bank to take steps to address the shortage of liquidity in the banking system when it meets to review its monetary policy Tuesday.
Mr Abe has backed the central bank's ultra easy monetary policy, which calls for pumping more money into the Japanese system.
Clearly, the Fed is a better approach to monetary policy, and the Federal Health Board could be the linchpin to a health system that ensures affordability, accessibility and quality.
The banking system is gradually healing and the housing market is recovering, while global monetary policy remains extremely accommodative.
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Key monetary policy operations, such as the LTRO, are working directly through their effects on the banking system and are providing support to large numbers of weak banks.
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The China Real Estate Index System (CREIS) data indicates that the property market is being supported by monetary policy easing, as well as efforts by the local governments to stimulate housing purchases.
The first is that stockmarket crashes need not wreak havoc, if central banks relax monetary policy at the right time and by the right amount, and if dangers of banking-system collapses are spotted early.
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