We also need to be vigilant about major regulatory differences for like activities that could put pressure on the soundness of the regulated sector. IV. Impact assessment, calibration and implementation and conclusion  Before I conclude let me say a few words about the Basel Committee’s process for finalising its reform package.
This could result from money illusion - for example, workers refusing to accept nominal wage cuts when, in fact, they may have suffered a similar reduction in real wages in the past because of inflation. Firms might also be reluctant to cut nominal wages because of notions of fairness.