Again it is very difficult to isolate the banking sector from capital movements, but the authorities can demand large capital requirements. Authorities could also supervise the currency mismatches in the banking sector properly. More capital and less foreign currency liabilities might render the economies less vulnerable to sudden capital movements and crises. 2  BIS Review 72/2004
At some point, it will be appropriate to slow the rate of increase in interest rates and the case for doing that becomes stronger as the level of interest rates increases.