This measure has the same characteristics as other fundprovisioning measures, in that it supplies funds against eligible collateral submitted to the Bank, but it differs in that the maximum duration of loans is four years and loans are provided to each counterparty based on the counterparty’s actual amount of lending and investment carried out as part of the plan to strengthen the foundations for economic growth submitted to the Bank.
The shadow banking system will constantly challenge policy makers because it adapts very quickly in order to evade regulatory measures. Regulatory arbitrage is a reality we have to face. It is therefore essential that we make sure regulatory measures are consistent – not only across sectors as I already pointed out but also across jurisdictions.