13 The idea that low capitalization can induce risk shifting in response to shocks hitting bank balance sheets was developed in a seminal study by M. Dewatripont and J. Tirole (1994) The Prudential Regulation of Banks, MIT Press. See also J. Tirole (1994) On Banking and Intermediation. Joseph Schumpeter Lecture. European Economic Review. 14 C. Bean (2014). The future of monetary policy.
In line with monetary policies applied in most developed economies, the South African monetary policy model is firmly directed towards the overall objective of creating and maintaining a stable financial environment.