As local debt markets are at an infancy stage in many countries in the region, this would make it difficult for potential D-SIBs to hold high-quality liquid debt instruments as “pre-emptive” liquidity buffers against early signs of stress. Hence, there is a need to find an appropriate way to deal with this issue, until debt markets in the region witness significant improvements.
29  25  See, for example, A. Crawford and H. Faruqui “What Explains Trends in Household Debt in Canada?” Bank of Canada Review (Winter 2011–12): 3–15. 26  Extrapolative house price expectations may arise during periods of strong house price growth driven by shifts in demand and supply factors.