2  BIS Review 125/2010  bank perspective, it is also important to assess the implications for the conduct of monetary policy. In particular, the new rules are likely to impact on the markets for liquidity and on the demand for central bank refinancing, thereby affecting the transmission mechanism of monetary policy.
Below, I will mainly focus on the impact of the liquidity coverage ratio, as its implementation is likely to have the most relevant effects for central banking, and its formulation is currently more advanced than the one for the other liquidity standard. 2. Implications for financial markets  Markets will be affected by the new regulation in several ways.