Such an approach deserves serious consideration. My expectation is that policies such as these will restrict dangerous pro-cyclical movements in debt and leverage, diminish the extent of maturity mismatches and the potential for runs, and discourage unsustainable asset price appreciation.
Importantly, the Federal Reserve and other U.S. regulators have also taken steps to ensure that the financial institutions we supervise enforce compensation policies that control incentives for excessive pro-cyclical risk-taking.