As far as the money supply is concerned, the growth over twelve months in M3 accelerated from 17,0 per cent in December 2001 to around 19 per cent in both January and February 2002, receding slightly to 18 per cent in March. Financial market volatility contributed to the public's strong demand for monetary assets.
Furthermore, I don’t believe that smaller and regional institutions are risk-free per se; instead, every individual credit institution requires robust regulation for the benefit of all. What this means is that even small market players cannot expect a regulatory free pass – they, too, are not exempt from regulation.