This kind of requirement could be an effective tool to limit procyclicality in securities financing and, thereby, to contain the risks of runs and contagion. Of course, it also raises many of the issues that make settling on a single policy instrument so hard to achieve,5 and the decision on calibration would be particularly consequential.
Hence, disclosure requirements have been complemented with business conduct requirements aimed at promoting fairness by financial intermediaries. Financial regulation in Europe now requires financial service providers to consider the interest of financial consumers even before their products are offered on the market.