Moreover, according to the concept of RWAs, government bonds have zero weights. With a risk-robust measure institutions would also have been better prepared for sovereign crises. The point is that such robust targets are independent of risk assessment errors and provide additional buffers to absorb risks stemming from the “known unknowns” and “unknown unknowns”.
It was surprising that the current account did not deteriorate faster and further, given the disparity between our growth rate and that of our trading partners. While the slowness of the deterioration has been a pleasing development, we think that the improvement could be some time in coming.