This will provide an update on the financial resilience and capital adequacy of the domestic banks. There are a clearly a wide number of factors at play that will determine the outcome of this exercise. The methodology and severity of the stress has yet to be agreed at a European level, for example.
Underpinning this commodity super cycle is a sustained increase in demand from rapidly growing emerging markets, particularly China and India. Together, they account for most of the increase in global demand for commodities in the last five years. For example, increases in Chinese demand have played an important role in the rise of oil prices seen since 2002 (Chart 31).