Examples of potential vulnerabilities include high levels of indebtedness or leverage, liquidity and maturity mismatches, and the mispricing of assets. In contrast, risks are events or outcomes that could threaten the ability of the financial system to perform its core functions. Risks materialize when trigger events – which are adverse shocks such as the recent dramatic drop in oil prices – interact with vulnerabilities.
In particular, sluggish growth abroad and trade developments have weighed on the economy and pose ongoing risks. Moreover, 1/3  BIS central bankers' speeches  inflation pressures remain muted, and indicators of longer-term inflation expectations are at the lower end of their historical ranges. Persistent below-target inflation could lead to an unwelcome downward slide in longer-term inflation expectations.