At the same time, if such regulations excessively constrain financial institutions’ activities, this might hamper the smooth transmission of monetary policy effects or weaken the ability to provide support to the economy from the financial side, which warrants due consideration in designing specific regulations. In addition, the fact that institutions and circumstances surrounding the financial system differ across countries should be borne in mind.
The Bank will actively participate in international discussions so that these will lead to the formulation of appropriate regulations taking account of the aforementioned considerations. Let me next touch on the functioning of the financial system.