It is especially important not to become complacent during a period of excellent macroeconomic performance about the underlying strength of balance sheet positions, debt-income ratios, credit quality, quality of bank credit risk management, and adequacy of prudential supervision.
This experience only reinforces the wisdom of the adage that “bad loans are made on good times.” Normal times may also be opportunities to transition from to more flexible exchange rate regimes. But, to an important degree, there is an almost inexorable tendency for vulnerabilities to build to some degree during expansions.