We can see how trust-based relations between banks and their clients have helped the economy and people during the pandemic. Winding up, I would like to say that the financial sector has generally performed well during the pandemic. Large-scale restructuring, lending expansion, better financial inclusion, and financial institutions’ stability are very important achievements. This proves that we will be capable of addressing any future challenges as well. I hope that, cooperatively, we will be able to find solutions to any challenges that might arise for the financial system in the course of the pandemic and post-pandemic recovery. The financial industry will be developing so as to support households’ welfare and the growth of the national economy. Thank you for attention. 6/7  BIS central bankers' speeches  7/7  BIS central bankers' speeches
Some factors have also been procyclical so that problems in the financial sector have had a negative impact on the real economy and vice versa. In good times, there is almost always a tendency to expand the provision of credit and to dismiss the risks this entails. However, when the downturn comes, the same players tend to run for the exit at the same time, which serves only to make the overall situation worse. Some of the characteristics of the financial regulations, for example the capital adequacy requirements and certain accounting regulations, have reinforced these tendencies towards herd behaviour among the financial players. We have been aware of these problems for a long time, but there have been no effective mechanisms for counteracting them. Nor have the supervisory arrangements adequately reflect the increased internationalisation of the financial sector. In recent decades, the financial markets have become increasingly interlinked and large, complex financial institutions now conduct extensive operations in several countries. At the same time, supervision has mainly been conducted on the basis of national mandates and focused on companies within individual, national jurisdictions. Supervision has thus lacked the oversight required. In the wake of the crisis, a number of initiatives have therefore been taken that aim to create a clearer link between the supervision that focuses on institutions and the more system-oriented supervision of stability, and to sharpen the tools we use to promote stability in general. So what needs to be done?