A countercyclical capital buffer - of the type ruled out by APRA only last week - may be needed as part of "a coordinated response if downside risks materialise," the International Monetary Fund said last week.In a statement following its "2019 Article IV Consultation Mission" with Australia, the IMF said "macroprudential policy stance remains appropriate but [authorities] should stand ready to tighten in case of increasing financial risks. "Australian banks remain adequately capitalized and profitable, but vulnerable to high exposure to residential mortgage lending and dependent on wholesale funding."The IMF said  "while the risk structure of mortgage loans has been significantly improved, renewed overheating of housing markets and a fast pick-up in mortgage lending remain risks in a low-interest-rate environment. "APRA should continue to expand and improve the readiness of the macroprudential toolkit. This should include preparations, for potential use in the event of a rapid housing credit upswing, for introducing loan-to-value and debt-to-income limits, and possibly a sectoral countercyclical capital buffer targeting housing exposures."APRA said last week It said it was "carefully monitoring these dynamics, but there is no notable evidence of increased systemic risk that has emerged to date."The countercyclical capital buffer will be increased if conditions emerge that warrant it. There is also a range of other macroprudential tools that APRA can activate if required."