To be more precise, the study of the Long-term Economic Impact Group has estimated that banking crises occur on average every 20 to 25 years. This estimate means that there is a 4.6 per cent annual probability of a crisis. The study shows that a 4 percentage points increase in the capital ratio lowers this annual probability to less than 1 per cent.
Policy implications and conclusions All in all, the risks to the inflation outlook are tilted to the upside, reflecting both supply- and demand-side factors. The question is how monetary policy should take such risks into account. The IMF has recently issued a clear recommendation: if inflation persistence is uncertain, risk management considerations speak in favour of a tighter monetary policy stance.