The annual growth rate of loans to non-financial corporations, by contrast, fell from its recent peak of almost 15% in April 2008 to 0.7% in August 2009 (see Chart 6). It should be noted that these figures cover all non-financial corporations, small, medium-sized and large, and do not provide a breakdown of the data by size of firm. In the case of non-financial corporations, the moderation in lending has thus continued, a fact which has raised some concerns among market observers that companies, and SMEs in particular, may be suffering from a true “credit crunch”. Against the background of these concerns, it is important to make a number of observations. First, looking ahead it is likely that loans to enterprises may moderate further before starting to recover. This would also be in line with past evidence, which indicates that the growth of loans to non-financial corporations tends to lag GDP growth by about three quarters. This may be related to the fact that non-financial corporations usually see their cash flows improve early in an economic upturn and thus tend to finance working capital and fixed investment with internal funds first, and only later with external financing. Given the current projections of a stabilisation in economic activity in the second half of this year, a turningpoint in loan growth may not be reached before early 2010. Second, recent credit developments appear to be fully in line with past historical regularities, once we take into account the severity and duration of the recession.

We can certainly expect that data quality and analytical frameworks will continue to improve over time. But our understanding of future crisis dynamics will never be perfect. Far from it. This means that we must be prepared to change course when required and acknowledge errors in judgment sooner rather than later, even if it means re-evaluating wellreasoned positions. This brings me to my second point on agility. Financial crises are inflection points of a cycle which materialise in the least predictable manner. This demands a high degree of agility of policymakers and the financial system to adapt to the new operating reality. Such agility is derived from crisis management frameworks that are well-anchored in clearly defined strategic outcomes and accountability structures, but also flexible enough to respond to a range of conditions. And critically, it requires investing in resources with deep experience and knowledge. Going back to the 1996 Everest expedition, Hall and his team had made every reasonable effort to incorporate comprehensive risk management and contingency planning into the preclimb plan. As things turned south, it became clear that the team was unable to respond quickly to the dynamic situation. Outdated and inefficient radio systems led to a communication breakdown of vital information. Physiological, psychological and technical readiness of some of the climbers was also in question. Their inability to respond fluidly to changing conditions created an overdependence on key resource persons. Combined with lack of experience to deal with a series of new challenges, leaders were incapacitated and team dynamics disintegrated quickly.