While the study found that financial consolidation has not significantly affected either the conduct or the effectiveness of monetary policy, we also concluded that central banks should remain alert to how future consolidation may affect the competitiveness of the markets that are most important to monetary policy. Central banks should also monitor potential future changes in the transmission mechanisms for monetary policy.
Finally, the study concluded that existing policies appear adequate to address risks to the individual firm and systemic risks now and over the intermediate term. Looking ahead, however, the study identified a number of areas that deserve careful attention by policymakers. For example, enhanced contingency planning could reduce systemic risk should a large and complex financial institution become seriously distressed.