An oversight function such as the FSC will be ineffective without tools with which to effect policy. It is important to have well-specified policy tools so as not to adversely affect the real economy. Dynamic provisioning can be one such tool; however it is difficult to implement and needs to be considered with care.
14  Figure 11  Drivers of changes in inflation expectations (daily; percentage changes)  1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 -0.2 -0.4 -0.6 -0.8 -1 -1.2 -1.4 -1.6 -1.8  03  /0 1 31 /22 /0 1 28 /22 /0 2 28 /22 /0 3 26 /22 /0 4 24 /22 /0 5 21 /22 /0 6 20 /22 /0 7 17 /22 /0 8 14 /22 /0 9 12 /22 /1 0 10 /22 /1 1 08 /22 /1 2 05 /22 /0 1 03 /23 /0 2/ 23  1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 -0.2 -0.4 -0.6 -0.8 -1 -1.2 -1.4 -1.6 -1.8  03  United States  /0 1 31 /22 /0 1 28 /22 /0 2 28 /22 /0 3 26 /22 /0 4 24 /22 /0 5 21 /22 /0 6 20 /22 /0 7 17 /22 /0 8 14 /22 /0 9 12 /22 /1 0 10 /22 /1 1 08 /22 /1 2 05 /22 /0 1 03 /23 /0 2/ 23  euro area  Source: C. Hoynck and L. Rossi (2023), “The Drivers of Market-Based Inflation Expectations in the Euro Area and in the US”, mimeo, Bank of Italy, Rome.