In effect, the State receives compensation in the form of new equity, thus diluting private shareholders. It is therefore understood that there is a limitation on credit institutions as regards the effective use of their own funds for the purpose of improving the quality of their balance sheets.
This recent episode raises the question of whether margining practices, including those between the clearing member and their clients, may be too procyclical. Financial markets remain vulnerable to further corrections that could potentially be triggered by an escalation of the war, or a faster-than-expected pace of monetary policy normalisation. Conclusion Let me conclude.