The proposed establishment of the Systemic Risk Council under the auspices of the ECB and the Council’s composition are a recognition of the extensive analytical capabilities developed by central banks in the fields of monetary and financial-stability analysis, their relevant expertise, and their closeness to the financial markets. The development of effective macro-prudential supervision is especially challenging because the institutional framework does not exist.
•  There are also marked differences with regard to market liquidity. Measured by turnover or bid-ask spreads, some EMEs already have relatively liquid markets. But, in many EMEs, liquidity remains low.