These examples show that the macroprudential tools could have an effect on the vulnerabilities by increasing the financial sector resilience. The Basel Committee has already proposed the following tools: -  countercyclical capital framework. This will require from the financial institutions to build up capital in good times, that can be drawn upon in periods of stress;  -  forward looking provisioning. Banks are encouraged to allocate provisions based on expected losses, as opposed to allocating provisions on the basis of incurred loss. This approach is less procyclical than the so-called “incurred loss” provisioning model. 4  BIS Review 90/2010  -  capital conservation measures. This measure includes activities aimed at restricting oversized payments of dividends, share buy backs and generous compensation payments by financial institutions. Capital requirements are undoubtedly the foundations of the microprudential regulation, but they also have a macroprudent dimension related to the procyclicality of the financial sector. Capital buffers which should confront procyclicality should meet two objectives: first, they should help the banking system handle the risks which could materialize in periods of crisis, and second, they should mitigate the reduction of the economic activity in a situation of downward movement of the economy. Nevertheless, several key issues remain open for discussion. Should the discretionary interventions on the buffers be reduced to the minimum, in order to prevent regulatory capture? On which geographical level should the aggregation be adopted in order to calibrate the buffers?

The requirement to make analysis in the following period of the need of modification to the other elements of the own funds, the capital quality, which can be qualified for risk coverage, as well as the introduction of countercyclical capital protection mechanisms remains. Also, the proposals for introducing the leverage ratio are in the process of analysis. The Basle Committee and the International Board for Accounting Standards in the MSFI 9 proposal support the creation of impairment based on the anticipated loss principle, and not on the incurred loss principle, as the current International Accounting Standards envisage. In the regulations pertaining to the credit risk management we apply the anticipated loss principle. 8  BIS Review 90/2010  Despite the intentions for accepting the International Accounting Standards, our valid methodology for classifying the credit risk exposure contains prudent filter, which requires from the banks primarily to know the debtor’s characteristics, its credit history and expectations regarding the payment of its liabilities. Such a solution in the regulations in line with the Basle recommendations, enabled our banks to have relatively sufficient amount of impairment for covering the incurred credit losses during the entire turbulent period, which prevented serious pressures on their capital base. The crisis showed that even well capitalized banks can be seriously affected, if they fail to have adequate level of liquidity. The Basle Committee developed two minimal liquidity ratios, short-term liquidity up to 30 days and second ratio with longer term character and represents structural liquidity ratio.