In addition, our imperfect knowledge of the state of the economy and the possibility of non-linearities in the economy’s structure and agents’ behaviour make the normative use of such simple rules questionable.
As regulators, however, we also do recognize that system-level outcomes may turn out to be different from the sum of the behaviors of individual stakeholders. All these challenges simply mean that systemic risk crisis management, and invariably financial stability at large, is a collective effort. Ladies and gentlemen, the ultimate objective is to improve the welfare of current and future generations.