Examples include cyclical adjustment of asset taxes in the property sector and a cyclically-sensitive regime for the tax treatment of savings.ii In summary, the combination of macroprudential policies and countercyclical fiscal policies can help to mitigate cyclical volatility in the economy.
After all, we stand to gain an international minimum standard that will apply in more than 100 countries – one that will bolster financial stability and minimise the additional regulatory work as a result of harmonisation. This standard will help to put banks’ capital base on a sound and sustainable footing and so help to restore further confidence in the banking sector.