Heightened prudential standards require the largest and most interconnected banks to meet capital surcharges and stricter riskmanagement standards than other banks. Stress tests evaluate banks’ ability to remain solvent and liquid when under severe macroeconomic stresses and have incentivized better risk-management and information systems within banks. A variety of reforms have helped address risks in the nonbank sector as well.
In uncertain times, calls for reliability and stability become louder still. Robust crisis and risk management appears to be more important than ever – this applies in particular to CCPs (Central Counterparties), which play a key role in keeping the financial system safe and steady.