It would, therefore, be useful to devise a methodology for segregating the structural component from the cyclical component in the credit/GDP metric and devise a robust methodology to deal with the sectoral approach including jurisdictional (international) reciprocity. 39. The issue of communication while applying countercyclical policies has not received sufficient attention.
First, as already noted, there is wide support for a resolution mechanism for large financial firms that would create a third alternative to the current, unsatisfactory options of bailout or possibly destructive disorderly bankruptcy. Both the reform bill passed by the House last year and the bill to be considered on the floor of the Senate contain variations on this basic proposal.