In individual, tight markets, they can also trigger and significantly amplify market reactions or act as a catalyst for a general reassessment of risks in the financial markets. This example serves to show that it is the type of business being conducted and not an agent’s formal status which should determine the type of regulatory treatment.
As interesting as the developments in Europe are, it is important that we do not lose sight of what is going on elsewhere in the world. In the United States, the recent data, particularly on the labour market, have been better than was widely expected (Graph 3). There are also some tentative signs of improvement in the housing market.