In other words, the supervisory framework had to be macroprudential—focusing on mitigating systemic risk and accounting for macroeconomic consequences. 3 This reorientation was a defining part of the 2010 Dodd-Frank Act, and internationally, in the Basel III Accord.
The recent events have also raised a number of new questions concerning the design of these operations and their communication to the market. First of all, central banks must consider carefully how far they should go in devising new instruments to provide liquidity. In particular, at what conditions should non-deposit-taking institutions be eligible for refinancing operations?