Meeting the liquidity requirements under Principle 7 is going to pose challenges for countries where markets are dominated by a few large players with limited liquidity support from private sources. In such a scenario, liquidity support from central banks assumes significance but it has its own challenges. First, central banks should have mandates for providing liquidity support.
Second, even if there are no technical obstacles, the challenge would be in addressing the moral hazards. Similarly, some of the principles would require changes in the legal and regulatory framework. Many jurisdictions are likely to face limitations while complying with requirements under segregation, portability, recovery and resolution, etc. In some of the jurisdictions, the Trade Repository (TR) may be a new concept.