Choice 2: in order to limit systemic risk, we can adopt very detailed regulation and BIS Review 47/2000  2  supervision programs that include a growing list of prohibitions. Choice 3: we can rely more on market discipline to supplement capital reforms and can maintain a level of supervision similar to the one we have today.
That is, stocks may be in equilibrium, but the flow rate will have to slow to keep them there. The resulting slowdown in inventory investment is likely, therefore, to be a significant drag on production in the second half of this year, offsetting, at least in part, the expected rebound in final demand. On the inflation side, there are also important crosscurrents at work.