We intend to communicate clearly and consistently on macro-prudential policy in order to improve people’s understanding and expectations, and to support our accountability for the implementation of macro-prudential policy and its effects. Emerging risks to financial stability Unsurprisingly our focus in recent times has been on our main vulnerabilities: household indebtedness, the dairy sector and our foreign liabilities.
But the financial system can become exposed to many other types of risks over time, in response to structural changes in regulation, technology, market structure or the physical environment. Some examples include conduct, cyber, climate change and FinTech. As we have seen in the UK and the US in the wake of the GFC, conduct and operational risk can have significant prudential impacts.