(Although, as I noted earlier, stock prices have risen quite a bit since 2002, their gains have been far outstripped by the boom in earnings.) Lower valuations for firms in industries that are in the throes of downsizing also provide opportunities for LBOs.
These events have demonstrated that the distinction between macro- and microprudential stability is hypothetical in practice. Therefore, there is an urgent need for close and continuous cooperation between macro- and microprudential supervisors, of course with due observance of the relevant legal provisions. Such cooperation can be achieved in different institutional settings.