Additional macroprudential policy tools should be made available to authorities to mitigate the build-up of systemic risk during times of financial exuberance. They should also support the sector’s ability to meet potential funding needs under stress, including from margin calls. Strengthened supervisory powers at EU level could further contribute to a timely and consistent use of liquidity management tools.
Moreover, the regulatory framework for money market funds should be re-assessed in the light of specific vulnerabilities in the sector. Beyond a strong macroprudential mandate and an adequate toolkit for the non-bank financial sector, accelerating progress towards completing the capital markets union remains a key priority.