However, banks’ profitability and the development of the lending market will be under pressure, with potential repercussions on the availability of credit for the real economy. In the euro area these developments are coupled with a limited role of capital markets in financing business. Most of the new regulations have been implemented and are already producing effects.
A pause is now desirable to allow time to adapt to the new system and to prevent the continuous introduction of new rules from itself becoming a source of uncertainty. Outstanding issues must be solved rapidly. The first important issue is that of internal models.