They will need to make difficult and potentially costly judgment calls, relying on imperfect real-time information. In this regard, it’s worth recalling Paul Samuelson’s quip that the stock market has predicted nine of the past five recessions. Will future regulators and monetary policymakers be accused of bursting 10 of the past 2 asset bubbles? These dangers are real.
The purpose-based criterion for the allocation of tasks meets the needs deriving from the growing integration of the different segments of the financial market and makes the identification of the responsibilities of each regulatory authority clearer. The law provides, pragmatically and flexibly, for the authorities themselves to manage the boundaries between their responsibilities and identify the necessary forms of coordination and information sharing.