Like the minimum margin requirements that U.S. regulators have imposed on derivatives contracts, numerical floors for SFT haircuts would serve as a mechanism for limiting the build-up of leverage in the financial system.
the macroeconomic imbalances and structural weaknesses that I mentioned earlier – on our medium-term prospects of output, employment and incomes are contained. Should we fail, hard times for all of us will last longer, while most of the burden will be shouldered by the most vulnerable, economically weaker social groups. 3.