Finally, exposure limits should be sufficiently robust to consider both capital at risk and cash out the door. Still other practices, such as diversifying risks and not assuming that only the best conditions will continue indefinitely, seem to be common sense. But even they, too, are occasionally overlooked or ignored.
To avoid this, at times banks may end up acting as a sort of “lender of last resort to markets”, with all the implicit effects on the availability of credit to other sectors of the economy and on financial stability. •  Since the intermediation model increasingly relies on capital markets, market infrastructures are of paramount importance.