But, the truth is that we are not sure enough of the implications of combining banking and commerce -potential conflicts of interest, concentration of power, and safety net and stability concerns -- to move forward in this area. Better, I think, to digest financial reform before moving in an area that will be very difficult to reverse.
Regarding financial risks from a longer-term perspective, there is a possibility that prolonged downward pressure on financial institutions’ profits may lead to a gradual pullback in financial intermediation. Meanwhile, the vulnerability of the financial system could increase, mainly due to the search for yield behavior.