But we certainly can’t count on all of these factors being present in future periods of economic stress. Around the world, regulators are deliberating about how to address a variety of nonbank entities that can pose systemic risks. In work published last week, the FSB highlighted the need for a macroprudential approach to nonbank financial intermediation.
9 Members of the FSB are not calling for bank-like regulation for nonbanks, but they recommend a framework of supervision and regulation that takes into account systemic risks that can be posed by nonbanks. I would also note one lesson we learned in March, which is that conditions in financial markets can deteriorate very rapidly and unexpectedly.