In fact, an adjustment is already working its way through the economy. And according to our latest bank lending survey, banks expect to tighten credit conditions markedly in the coming quarters. [20] The second key development will be how resilient the domestic economy is to the combined impact of the war, lower real incomes and a darkening global outlook.
Let us not forget that we, as central banks, must at all times seek to counter such short-term memory of past lessons, for the collective benefit of long-term financial stability and sustainable economic growth. 3  [Future challenges to banking supervision and regulation] Ladies and gentlemen, let me now turn to some remaining challenges from the perspective of developing economies.