Open economies are vulnerable to financial shocks, which originate abroad. In such circumstances, macro-prudential policy needs to play a proactive role in order to mitigate the adverse impact of external shocks on the banking system, such as that undertaken by the QCB in recent years.

From an overall regulatory perspective, it will therefore be crucial to identify the main policy tools that may be used by the FSRCC to mitigate risks posed to financial institutions, market structures and consumer and investor behaviour. As the FSRCC includes the heads of the regulatory authorities, this will enable a coordinated approach to be developed to ensure that sources of potential risk to the financial system can be effectively and comprehensively addressed.