However, with the NSFR still under discussion, and with the Basel Committee in the process of reconsidering the standardized banking book risk weights and capital regulations associated with traded assets, there are opportunities to pursue these options. Requirements building on any of the foregoing options would by definition be directly applicable only to firms already within the perimeter of prudential regulation.
The obvious questions are whether these firms at present occupy enough of the market that standards applicable only to them would be reasonably effective in addressing systemic risk and, even if that question is answered affirmatively, whether the imposition of such standards would lead to a significant arbitrage through increased participation by those outside the regulatory perimeter.