It’s changing because the products and services are also changing in a more sophisticated way; that means the ability to recognize risk, measure risk, manage risk, offset risk, is utmost important for financial institution. The third challenge, obviously, is the process of financial deepening which affected market structures, complicating the task of regulatory oversight in several ways.
A simultaneous improvement in the financial condition of banks, households, and governments will be a difficult and slow process as long as high risk aversion prevails in the capital markets and until there is growth and a recovery of investment activity. The improvement is especially challenging in countries which have lost their competitiveness and have run current account deficits, financed by borrowing.