Exposure limits, in particular, could act as a coordinating device for speculative attacks. Since a change in banking regulation would likely herald a similar change in other parts of the financial system (most notably the insurance sector), the entire domestic financial sector could be affected.
This harbours the risk, if this shock is accommodated, that it will result in sustained inflationary pressure with adverse effects for growth in these countries and beyond. Therefore, concerted efforts by monetary authorities worldwide are needed to fight global inflation.