The issue of the optimal structure of supervision was discussed well before the recent crisis, with the FSA in the UK being seen as the prototype of a unitary regulator outside the central bank, the twin peaks Dutch model as another prototype, and various models of coordination and non-coordination among multiple regulators providing additional potential models.
But all of us involved in the monetary policy process must try to synthesise a range of disparate information, including official data, anecdotal evidence, and qualitative developments, to construct a “narrative” about how the economy is evolving: What forces are determining economic activity now, and what do they suggest for the future?