But, on the other hand, there are several factors working in the other direction, contributing to the easing of inflation. These include: an easing of the COVID supply chain disruptions; a decline in commodity prices in global markets; and slow growth in aggregate demand, particularly in household consumption.
Although the revised Basel II framework is part of a solution to this problem, broader reforms are necessary. These might include capital surcharges for systemically important institutions, better resolution regimes as well as a stronger market infrastructure.