The activities under this stage would include: -  2  Continued observance of macroeconomic indicators of convergence including:  BIS Review 20/2007  •  Inflation rate of less than 5 per cent. •  Overall Budget deficit/GDP ratio (excluding grants) of less than 3 per cent. •  Elimination of Central Bank financing of Budget deficits.
Excessive or inappropriate regulation can stifle efficiency, and invite problems of what are known as moral hazard and adverse selection. It may even provide incentives for the over regulated business overtly or covertly depending on the nature of the business to move to entities which are not so regulated.