For example, Non-Bank Finance Companies (NBFCs) are supposed to take on greater risk, such as loans to real estate developers, because their liabilities are longer term. In actuality, though, many have substantial borrowings from banks. It would be better from the perspective of systemic risk if they replaced bank debt with market borrowing.
The effectiveness of these enhancements to the governance framework will in part be determined by the quality and independence of the economic analysis that underpins them. Without reliable statistical data, interpreted and acted on by independent arbiters, we cannot be certain that the governance framework will provide the quantum leap forward that is necessary.