Importantly, we should not forget that, usually, there are a number of important domestic distortions that interact with capital flows and credit growth. In practice, for political reasons, we see subsidies to investment in real estate and to debt in many countries. These subsidies are instrumental to creating the initial froth in real estate prices and investment. By all means, the first thing to do should be to remove these distortions. It is also important to remember that excessive borrowing by a country often means that someone else is lending excessively: macroprudential policies apply to lending countries just as well as they apply to borrowing countries