SPEECH  The banking channel of monetary policy tightening in the euro area Remarks by Philip R. Lane, Member of the Executive Board of the ECB, at the Panel Discussion on Banking Solvency and Monetary Policy, Summer Institute 2023 Macro, Money and Financial Frictions Workshop Cambridge, Massachussetss, 12 July 2023  Introduction I will focus in this speech on the banking channel of monetary policy.
For example, capital adequacy standards could also be seen in this light, considering that they would increase costs of engaging in riskier behavior. Some might even argue for financial transaction taxes as an option, though I do not believe that benefits would outweigh the costs, such as their impact on market liquidity.