The process would begin by establishing that asset market imbalances had become exceptional and unsustainable − as reflected in asset prices and/or excessive credit. Then we would determine whether this was likely to contribute to macro imbalances in the future, which warranted policy action to bolster financial sector resilience and/or moderate the credit cycle.
7  Organisation for Economic Co-operation and Development (2018): OECD Economic Outlook 2018, Issue 2, November. 7  It should suffice to recall that, by virtue of their growing importance and integration into the global economy and financial system, the scope for spillovers from EME shocks into AEs has risen over the past decades to significant levels.