And this makes sense, given that financial cycles vary across countries and across sectors. At any point in time, each country or sector might be in a different stage of the cycle and thus face different risks. Research shows that in a monetary union, macroprudential policy can play a very important role. Unlike monetary policy, it can target specific sectors or countries.
6 The Australian housing risk weight is in the process of being increased to an average of 25%. 7 Data as at most recent Pillar 3 regulatory disclosure.