While it would be inadvisable to apply bank-style regulation to all entities that make use of short-term wholesale funding, a degree of consistent regulatory treatment is desirable to address bank-like risks in the shadow banking sector and to forestall regulatory arbitrage. The Board has advocated for international measures to forestall the development of highly volatile funding structures outside the regulated sector.
Decisive steps for establishing an integrated financial framework will help to accomplish this objective. The future single supervisory mechanism (SSM) is one of the main building blocks. It is a crucial move towards re-integrating the banking system. To sum up, the economic analysis indicates that price developments should remain in line with price stability over the medium term.