In general, all of the banks reviewed last year have conducted their own internal assessments of lessons learned and, in their own self-interest, are reassessing their business strategies regarding hedge funds and moving forward to make necessary enhancements to their risk management processes.
For instance, measures aimed at limiting credit supply may simply push activity into the shadow banking system or lead foreign lenders to step forward. Macro prudential policy will therefore necessarily be a process of trial-and-error, at least initially. Moreover, policy-makers will likely employ several tools and it may be difficult to assess their interactions in advance.