I will then turn to what I’ve just referred to as the next important step in risk management − transition planning − and what banks, as well as supervisors and other competent authorities, need to do in order to make it work.
In this short presentation, I would like to argue the following two points: Firstly, the financial innovations of the past quarter century have blurred the dividing line between banks and non-banks. These developments have made it possible to shift risk back and forth between the banking system and capital markets.