In addition, the favourable financial environment created partly by the Bank’s monetary easing is expected to continue underpinning the economy. With regard to prices, import prices are decreasing slightly, reflecting a temporary decline in international commodity prices such as crude oil prices.
Third is establishment of regular stress testing and capital planning. These complementary supervisory tools serve two related functions. First, they make capital regulation more forward-looking by subtracting losses in asset values and earnings estimated to be sustained in an adverse macroeconomic scenario, in order to determine whether firms would have enough capital to remain viable financial intermediaries.