During a prolonged period of rapid credit expansion, a central bank's regulatory authority identifies that commercial banks have become highly leveraged, leaving the wider financial system vulnerable to a systemic shock. To mitigate this systemic risk and build resilience without raising the main policy interest rate, which policy measure is the regulatory authority most likely to implement?
Conducting expansionary open market operations to purchase sovereign debt.
Lowering the minimum reserve requirements to ease commercial bank liquidity constraints.
Implementing a countercyclical capital buffer (CCB) to increase capital requirements.
Abolishing deposit insurance schemes to eliminate moral hazard among retail depositors.
