In particular, monetary developments continue to be fostered by portfolio shifts, reflecting a sustained preference on the part of investors for liquid and secure assets. This is confirmed by evidence from both the components and counterparts of M3. Indeed, loans to the private sector increased at a much more moderate pace than M3.
For example, proposals are now under consideration to require the largest and most interconnected banks to maintain a buffer of debt that could be converted to equity or that could otherwise absorb losses upon failure.