These entities rely on funding markets for leverage. From a macro prudential perspective it is not just necessary to regulate banks exposures to these entities but also to limit the overall leverage of these entities if they are permitted to access funds directly from banks and other financial intermediaries and indirectly via funding markets. OTC market infrastructure 20.
For a discussion, see Mishkin (2007). Quoted text from the Federal Reserve Act is in 12 U.S.C. § 225a (2000), https://www.federalreserve.gov/aboutthefed/section2a.htm. 10  -5Our existing monetary policy strategy is laid out in the Committee’s Statement on Longer-Run Goals and Monetary Policy Strategy.