There is a global financial cycle that affects capital flows and asset prices worldwide. This cycle is linked to market uncertainty and risk aversion. Countries with more credit inflows are more affected by this global cycle. The cycle is not tied to specific economic conditions in each country. The main factor driving this cycle is the monetary policy of major central banks. This cycle limits the ability of countries to have independent monetary policies. To address this issue, policymakers can consider targeted capital controls, adjusting monetary policies, and implementing stricter limits on leverage for financial institutions.