Although the Treasury market remains deep and resilient, there are nonetheless reasonable questions as to whether market functioning can be improved. The events of October 15 last year have been folded into the more general debate about market liquidity across a number of markets. I take the concerns about a decline in market liquidity seriously.
Another distortion is that the current reforms are not uniform across countries. For example, countries with a large financial sector, such as Switzerland, will require large banks to hold more capital than the international standard.