This has led to a shortening of product lifecycles and innovation and technology have become key sources of competitive strength. The country now commands a diversified industrial base that has shown resilience in the face of multiple challenges posed by shocks such as the Global Financial Crisis, the recent COVID-19 pandemic and now the war in Europe. New Opportunities and Challenges 14.
This realisation has spurred a search for techniques that will make banking systems more resilient to the financial version of the economic cycle. Banks need to be encouraged to build up capital cushions in good times so that they are available to protect their lending when the cycle turns down.