From a broad cyclical perspective, ensuring resilience is built early in the cycle is most effective – and this has informed the timing and calibration of the mortgage measures and the counter cyclical capital buffer (CCyB). This so-called CCyB is another example of a tool that can build resilience in the banking system to withstand future shocks.
They add to the macroeconomic and financial stability challenges from volatile capital flows in a financially globalised world. In fact, recent developments call for greater recognition of global factors in domestic inflation dynamics and macroeconomic developments which underscore the need for enhanced policy coordination and dialogue among countries to achieve better outcomes. 29.