Our approach currently is for interest rate policy to be focused on inflation, and for the Bank’s Financial Stability Committee (FSC) to use other macroprudential policies to moderate financial stability risks. While our tool-kit is still being refined, we have implemented the framework of a countercyclical buffer for banks which will be over and above the capital requirements of individual banks.
A sound banking system is one in which firms are well-diversified, have many different revenue sources, and do not concentrate their risks in one particular economic sector. This is one of the most important lessons we can draw from the financial crisis. Thank you for your attention. BIS Review 162/2008  3