In particular, I will highlight that macroprudential policy will rightly gain in importance and that central banks ought to make a substantial contribution without, however, compromising their main objective – price stability – and their independence.
Small open economies are influenced greatly by the economic situations of major countries and international financial market conditions. In terms of their real economies they are experiencing economic slowdowns in line with sluggish exports. On the financial side, they are seeing high volatility in capital flows and price variables, such as exchange rates.