Ultimately, it is the risk of this credit contraction, and its implications for economic activity more broadly, that may be the most compelling basis for regulatory intervention. 2  BIS central bankers’ speeches  Fire-sale externalities in securities financing transactions The preceding discussion makes clear why SFTs, such as those done via repurchase (repo) agreements, are a natural object of concern for policymakers.
All these challenge us as we endeavor to provide a sound monetary policy environment, while advancing reforms that promote growth and respond to changes in global financial conditions. Our resolve to follow good governance and international best practices in our reform agenda has provided us the discipline necessary to craft appropriate responses and avoid steps that could distort rational market behavior. III.