In these circumstances, some believe that it is technically impossible to construct a simple baseline and reasonably small number of alternative scenarios. Communication difficulties are another problem. The information contained in conventional forward guidance may be useful to market experts in that alternative scenarios can guide them when the realized state of the economy deviates from the baseline.
4.2  Cross-country spillovers of macro-prudential policy and their interaction with financial cycles  A second area which is particularly relevant in the euro area context and where research is also needed, relates to the cross-country spillovers of macro-prudential policy and their  19  See Drehmann et al (2012) and Schüler et al. (2015). 20  See Ari, Kok, Paries and Żochowski (2015).