While the ultimate objective is for all banks to be fully aligned with our supervisory expectations, the thematic review is intended to be a learning exercise – not just for supervisors across Europe, but also for the banks. This is why we have made a point of sharing good practices we have observed – so that banks can draw inspiration and push forward.
Market discipline becomes very important for the orderly unwind of not just a few of these structures and to avoid widespread contagion to other markets. Effective risk management, therefore, now requires a better understanding of risks by the borrower and lender, the recipient and investor, as well as the supervisor. V.  BSP’s policy responses  These global forces necessitate action from central banks.