Graph 5  Graph 6  4  BIS Review 153/2010  Also, holdings of cash by US corporations are at record levels – almost $ trillion or equivalent to over 20 per cent of corporate debt (Graph 7). This means that US corporations are in a strong position to increase investment when confidence returns.
A new capital policy tool that is introduced in bad times however is likely to trigger a reduction in credit and place an additional drag on the economy. Bad timing increases the cost of macroprudential and regulatory interventions, potentially rendering such measures counter-productive.