This does not preclude allowing the budget’s “automatic stabilisers” to operate over the cycle (though it might be observed that, with an elongated upswing like the one we have been having, it is getting more difficult to decide what should be thought of as a temporary rise in revenue and what can be assumed to be permanent).
The second issue is how to measure various risks such as credit, market and operational risk by an advanced method and to align capital charges closely with these underlying risks. The Basel Committee on Banking Supervision chaired by Mr William McDonough, President of the Federal Reserve Bank of New York, is undertaking reform of the 1988 Basel Capital Accord.