Central banks should react more "symmetrically" to economic booms and busts if they are to retain their ability to react credibly to the extremes of the business cycle, according to a paper by Claudio Borio, head of the monetary and economic department at the Bank for International Settlements (BIS).

In the paper, first presented at a Bank of Italy conference in honour of Curzio Giannini last year, Borio warns that "failing to acknowledge the limitations of what monetary policy can do to foster