For one thing, as was shown by the experience with commercial real estate lending guidance issued before the crisis, supervisory guidance is an imperfect tool. In addition to the issues surrounding real-time interventions mentioned earlier, that episode revealed the potential for substantial political resistance to supervisory actions directed at specific sectors.
Still, with the institutionalization of financial stability concerns at the Federal Reserve and the FSOC, and with the ongoing improvements in relevant analytic capacities, there is room to develop this tool further. The second place to work on time-varying tools is found in another element of the new capital regime, the countercyclical buffer provision of Basel III.