Category: Basel III
Published: 03 February 2012
Macro-prudential policy-making, which aims to preserve the stability of the financial system as a whole, is still in its infancy in most countries, and there are concerns that systemic vulnerabilities may build up again before solid progress is made to prevent it. Financial systems will need to adjust to the new reforms, particularly as the financial recovery takes hold and interest rates rise. New entities that are being established to improve systemic oversight are already collecting and analysing data and issuing policy advice, particularly in light of the present low interest rate environment that could well lay the groundwork for new financial vulnerabilities.
Financial institutions must ensure they can optimise their costs while investing for future growth in a deliberate and sustainable way. But how far have they actually gone down that road? What remains to be done? And how do the institutions view the new requirements?