- Since the crisis we recognize that credit cycles develop in part independently from business cycles. A new conceptual framework is needed to ensure solid foundations for prudential policy. This insight is needed for the implementation of the new macroprudential policy approach introduced by Basel III, but also for the development of industry risk models over the cycle.
- Specific issues on macroprudential regulation concern its relationship with monetary policy, and not least with quantitative easing measures. In particular, how does the housing market and capital flows are affected ?
- An assessment is needed on the cumulative impact of new regulation on return on equity in banking, and more generally on sustainable bank business models for the future.
- What is the implementation path for liquidity regulation, and what is the role for private secured funding in perspective as central banks reduce their market participation ?
- There are open issues on incentive structures and bank culture. How do incentive and remuneration structures work within financial institutions? Are there different approaches in different sectors of the markets? What is the risk culture of different types of institutions?
- A key question is the development of EU securitization markets and ratings agencies, important for a good balance between capital markets and intermediaries. How do we get this market working in the EU again ? In the US securitization is ensured by active government-owned institutions in the residential real estate market. How can we increase price transparency, also on non real estate securitization ? Do ratings agencies make markets more efficient, and how do we regulate them? There is almost no empirical research on these issues outside the US.
- Why have derivatives markets grown so enormously? Is at least some of this activity excessive, and should policy seek to limit it? What are the likely effects of introducing more transparency here? Are these markets potential or actual sources of instability, and might they amplify disturbances arising elsewhere in the financial system or the real economy?
- The changing role of technology in finance is raising questions on how it can be regulated. How to respond to technological innovations such as new means of payment, such as bitcoins and Apple Pay? What does this mean for Data Protection?
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