From a policy perspective, this was the wherewithal for crafting Circular 854 which adjusted the minimum capital levels required of banks. It is a recognition that banking has moved on from the folders and filing cabinets of old to the systems and interfaces of today.
But changes in global risk appetite and the portfolio reactions to idiosyncratic risk factors pose additional challenges and trade-offs for monetary policy. Benefits and Challenges of International Financial Integration Let me begin by highlighting some trends that I believe are important to understand the context in which emerging markets’ central banks operate.