Inter-agency committees have difficulties reaching rapid decisions, and there would be great difficulty in coordinating decisions on monetary and macroprudential policy if one were under the control of the central bank and the other under the control of the Treasury. I conclude that the central bank should be given the responsibility, and the tools to do the macroprudential job.
For that to happen, the environment has to be right. In many countries, for instance, entrepreneurs still have to overcome major bureaucratic obstacles simply to set up a business. Once they have done that, they need capital and labour in order to grow. That brings us back again to flexible markets, which can react to new and changing demand.