First, it sends a signal to the industry that authorities stand ready to apply macro-prudential tools when systemic risks are identified. Second, we need to have a broad set of policy tools ready to address the risks stemming from financial firms at large. Focusing on a limited set of entities will not allow us to fully understand what instruments are needed in our toolbox.
Going beyond systemic financial firms, it is necessary to develop appropriate macroprudential tools to address the systemic risk of the remaining non-bank financial system. This is in the spirit of what has been done for the banking sector, where a range of policy tools is now available to address risks to banks from developments in specific markets and activities.