Although the members of the Basel Committee have not yet achieved a final consensus on the exact structure of an operational liquidity management framework, the proposed new standards for liquidity risk management are a welcome development. In combination with a more robust and efficient supervisory landscape, the proposed Basel III recommendations should help to bolster liquidity risk management practices in the financial sector.
However, that is not the curse, but rather the blessing, of competition. VII There can be no doubt that the euro opens up many options for Europe’s future, ranging from less dependence on exchange rates to larger and more effective financial markets and lower costs.