Banks’ capital levels have been increased to improve resilience and more liquid assets are required to cover banks´ liquidity needs in stress. Banks will also be required to fund their operations from stable sources that reduce the reliance on the short-term wholesale market funding. Plans are laid out to guarantee an orderly resolution of the largest and systemically most important banks.
As banks adjust to these requirements they will have to re-evaluate their business models. While banks have become safer, the new requirements may have pushed parts of their traditional business outside the banking sector to the so called shadow banking sector, which has been growing recently.