This targeted build-up of capital buffers and the application of borrower-based measures takes into account heterogeneous cyclical developments across countries  2/4  BIS - Central bankers' speeches  and sectors in the euro area. It fine-tunes the overall policy mix and complements the single monetary policy in support of overall financial stability across the euro area.
Despite the overall good resilience of the euro area banking sector, certain countries have in recent years seen a build-up of financial vulnerabilities, notably related to residential real estate prices and growing household and firm indebtedness. Some further careful and targeted tightening of macroprudential policy would be beneficial in selected countries at present.