These efforts do not appear to have been wasted, as attested to by the lack of serious losses from defaults of hedge fund counterparties in the recent turmoil. However, banks do not appear to have followed those best practices for their counterparty relationships with monoline financial guarantors, where counterparty risk has crystallized into large losses.
It had persistent repercussions on inﬂation and was one of the reasons why monetary policy has been struggling so much over the past decade. Sure, safeguarding ﬁnancial stability is, ﬁrst and foremost, a task for macroprudential policy.