•  During asset price booms it is important to ensure that banks’ exposure to capital markets and real estate is not excessive and to understand that banks can be subject to foreign exchange risk even without any currency mismatches in their books, when their constituents have huge unhedged exposures.
•  Management of capital account is important for countries having chronic CAD and where inflation and interest rates are persistently over global levels. •  Dollarisation of the domestic market or internationalisation of the domestic currency can both require careful management.