Some have urged the Board to adopt this broad principle as a rule, while others have urged the Board to preserve for lenders the flexibility to exercise their judgment in determining the likelihood that a given borrower can repay a loan.
Such a shock could result from a fall in risk appetites of a broad range of participants, perhaps in conjunction with a fall in the liquidity available to hedge funds and other active traders. Hedge funds may be shielded from liquidity demands from their investors, by lock-up periods and withdrawal gates, but they still need liquid funds to meet margin calls on their positions.