The ESRB has a comparative advantage in analyzing and addressing macro-prudential issues that involve the cross-border and cross-sectoral dimension. Therefore, one might strengthen the ESRB’s capabilities to focus on these issues. 2. The coordination and notification requirements that are in place right now are overly complex.
First, it will create liquidity and promote price discovery in the markets for these assets. Second, this measure will make the balance sheets of these financial institutions more transparent so a reasonable assessment of their financial condition can be made by investors, reducing uncertainty considerably.