Even if such risks are initially contained through appropriate corrective measures, market participants’ risk appetite may be so strong as to eventually render those corrective measures ineffective, and lead to a bubble. There is no panacea which quickly dissipates macroeconomic risks.
In particular, I want to underscore the need to enhance data quality, harmonize regulatory and reporting practices, and building adequate capacity among the Regulators. This requires moving swiftly to develop SMART – Standardized, Measurable, Actionable, Reliable and Transparent Regulatory and Supervisory Frameworks – surveillance supervisory approaches, and assessment tools.