Second, banks may try to reduce the maturity of the loans they grant to corporates, small and medium-sized enterprises, and households in order to shift the roll-over and liquidity risk to the final users of financial services. But the new regulation is designed to make this strategy unattractive for banks, as only a part of these loans needs to be financed by stable funding.
Furthermore, the Governors and Heads of Supervision have decided that the final implementation of the new liquidity measures will be preceded by a long “observation period” during which supervisors will monitor any unintended consequences of the new measures and modify the regulation accordingly.