It is not the price to buy and sell the collateral outright or to lend cash unsecured. 6  BIS Review 66/2008  of liquidity. So how can we achieve symmetry in our approach? In my opinion, it is worthwhile for policy-makers to consider the promotion of macro-prudential regulations that could serve to restrain pro-cyclical liquidity creation among banks and market makers when appropriate.
To be clear, the same tests should apply in terms of "when appropriate." There would also be the added complication of determining where to house this regulatory authority, and how it would be coordinated across jurisdictions. Despite these issues, this is a serious concern that warrants closer attention. Conclusion The market turbulence that began last summer has eased in recent weeks.