Will regulation be able to catch the market-players that have previously dodged regulation, such as the US shadow-banking system around the infamous sub-prime mortgages? Or will the regulator trail behind resourceful operators perpetually seeking ways around rules and regulations? Credit ratings by the credit agencies tweaked market signals to the point that they failed to give early warning of the impending collapse.
Thus I suspect that LSAPs have, by changing the structure of term premiums in the market, helped encourage an extension of debt maturity by both financial and nonfinancial firms. All else being equal, this development is a good thing from a financial stability perspective.