When presumptively risk-free, highly liquid assets backed by the highest-grade sovereign are subject to large swings in value, the risk-return profile of virtually all other assets becomes highly uncertain. The resulting portfolio reallocation boosts demand for Treasury securities, and reduces demand for assets that are genuinely riskier, placing upward pressure on risk premiums across a wide range of markets.
As a result, already 1/3  BIS central bankers' speeches  3 specialized bank licences have been issued, with 4 applications under consideration. And, on top of that, we have initiated the creation of a legal framework for crowdfunding and peerto-peer lending. This helps avoid regulatory arbitrage and eliminates the obstacles to the much needed development of alternative financing sources.