For example, resilient banks are more likely to act as market makers for certain capital market instruments and may ideally buffer extreme price movements in times of crisis. Furthermore, well-capitalised banks are less likely to be forced to fire sale certain asset classes. This leads to less market disruptions in times of crisis.
Given recent events, it is appropriate to raise the bar on appropriateness assessments in the approval process for complex structured transactions by taking into account the business purpose and economic substance of the transaction.