Third, we have seen that interest rate risk and liquidity risk, say, can cause stress in the banking system that is more severe than assumed in standard stress tests and individual supervisory indicators. As risks evolve, banks need to adapt their risk management practices. And supervisors are challenged to adapt their focus as well.
For instance, interest rate risk is a central supervisory priority in Europe. We monitor it closely in our supervisory practice and expect banks to adjust if risks are not sufficiently covered. Fourth, the turmoil raised questions among market participants, for example about the regulation of mid-sized banks, the scope of deposit insurance and the functioning of resolution regimes.