For example, financial institutions held securitized products on their trading books, for which risk weightings under capital adequacy regulations are small, although they later turned out to be highly risky financial products.
To that end, we have participated fully in the FSB’s shadow banking monitoring exercise and will work together to consider how best to implement recent FSB recommendations.17,18 Finally, we have moved forward in the implementation of the G-20 commitments for OTC derivatives.