We can improve savings rates, especially through fiscal policy, but we are not going to be a high-saving economy for the foreseeable future. For this reason, we need to get to a position where we can safely and sustainably fund investment demand in excess of local savings. Instead of bemoaning a weak current account, we need to develop a strong capital account.
Let me stipulate that a regulatory structure based on formal risk-management techniques will imply, to some degree, a cyclical pattern of minimum regulatory capital requirements, exactly like the internal pattern of economic capital needs at a bank using modern risk-management techniques on its own. The question is: Is that a bad or good thing?