It’s changing because the products and services are also changing in a more sophisticated way; that means the ability to recognize risk, measure risk, manage risk, offset risk, is utmost important for financial institution. The third challenge, obviously, is the process of financial deepening which affected market structures, complicating the task of regulatory oversight in several ways.
As financial instrument become more complex; the boundaries between different types of financial market activity (lending, trading, insuring) become blurred; more claims become securitized and were exchanged in markets as traded instruments; and much financial activity became international in nature, blurring boundaries of responsibility among authorities. Now, the question is, what are the implications for bankers and regulators such as central banks?