Nonetheless, there will always be competing views on the size and importance of any deviation from that level and a healthy dose of judgement is therefore essential when formulating policy. Second, no matter how good the indicators are, there is an unavoidable limit to how informative any indicator can be arising from the possibility of multiple equilibria.
That is, a certain reading of an indicator may be compatible with financial stability if confidence is high and incompatible with stability if it is low. Moreover, the economy can switch from one state or equilibrium to another with little or no forewarning from the indicators.