Going forward, it is anticipated that growth in advanced economies will strengthen on the back of supportive fiscal and accommodative monetary policies and lower commodity prices. However, weaker growth in emerging markets and resultant feedback loops, harbour downside risks.
Rather, we will seek to identify stresses in the economy as well as the regulations and practices that have the potential for serious macroeconomic consequences. In doing so, we will want occasionally to change behaviours, conventions and even regulations to mitigate threats. The latest edition of the Bank's Financial System Review (FSR), which was published last week, is a first step.