In such a situation, loosening the macroprudential stance in one host country might channel intermediation activity from another host. In addition to violating fairness, such beggar-thy-neighbour regulatory policies can lead to a mutually detrimental ‘race to the bottom’ regarding regulatory standards, 10 leading to the increase of region-wide systemic risk.
Stakeholders like NBA have expressed strong support for the agencies to work together to modernize CRA. By reflecting stakeholder views and providing an appropriately long period for public comment, the ANPR advances the goal of building a foundation for the banking agencies to converge on a consistent approach that has the broad support of stakeholders.