Using pillar 2, supervisors would plan to evaluate the internal capital- allocation process for integrity and economic sense, and to ensure that the underlying processes and assumptions used to measure economic capital are reasonable and consistent with the principles in pillar 1.
Mr Macfarlane takes the opportunity to expand on the role of monetary policy in managing an economic expansion  Talk by Mr I J Macfarlane, Governor of the Reserve Bank of Australia, to the Economic Society of Australia, Victorian Branch, Melbourne on 11 February 2000.