The transparency of the collateral chains, in which both regular banks and shadow banking entities are involved, is also improved. During the financial crisis we learned that opacity and uncertainty about the extent of rehypothecation and the risks involved can severely undermine confidence in counterparties.
The ABS market in Europe Continuing on the development of a particular shadow banking activity, I would say that a step towards the right direction has been taken as the new regulation supports the ABS market (or securitisation market in generally) and endeavors to ensure growth, while for example the proposed regulation on structural reform in EU aims to better separate shadow banking from the traditional one.