In the first place, this goes for the banking sector itself, which needs to make sure that its capital positions, risk management and governance strengthen its resilience in a very uncertain and volatile environment. But supervisors must also remain vigilant. As central banks hit the brakes, financial stability risks inevitably increase.
In the United Kingdom, policymakers put in place a range of measures to limit the buildup of risks in the housing market, and, partly as a result, the housing market appears to be cooling somewhat. Nonetheless, U.K. policymakers have acknowledged the potential for monetary policy adjustments to play a role in the pursuit of financial stability.