Sveriges Riksbank and Schnabel, I. and Shin H. S. (2018) “Money and trust: lessons from the 1620s for money in the digital age”. BIS WP No 698. 4 Camera, G. (2017). “A perspective on electronic alternatives to traditional currencies”. Sveriges Riksbank Economic Review 2017:1. Sveriges Riksbank. 5 The copper standard was introduced in 1624. The reasons for this were the shortage of silver and gold due to the prolonged wars, and a desire to maintain the price of copper, which was Sweden's most important export product. 2  2 [15]  than several kilos of metal. This is how Europe's first modern paper money to use printing technology came to be. Unfortunately, the bank issued more money than it had cover for, leading to bankruptcy. But the need for a bank remained and, a few years later, the Riksbank was founded and was eventually able to issue banknotes on behalf of the government under more controlled forms. 6 However, it was not just the government that was allowed to issue banknotes at that time. For example, in Sweden, private banks were allowed to issue their own banknotes into the 20th century. The Riksbank did not gain a monopoly on issuing money in the form of banknotes and coins until 1904. The problem with the private issue of banknotes was the risk of the bank issuing the money entering bankruptcy, in which case this money could fall in value.
2  BIS central bankers’ speeches  In addition, none of these sectors is unregulated today in Europe (AIFM directive for alternative funds, UCITS directives for funds, Solvency 2 for insurance, EMIR for CCPs) and replicating some rules stemming from banking supervision to these entities would simply be irrelevant. More generally, it is up to the policy makers to act consistently and try to anticipate and mitigate any possible unintended effects of their policy decisions. For instance it might seem contradictory to encourage central clearing of derivatives or trading on organized trading platform as a means to reduce systemic risks on the one hand, while on the other hand levying a Financial Transaction Tax on these operations if they are deemed safer. Policy makers should make sure their actions will not be a factor of market instability which could spread to the market and create another crisis. Conclusion As we can see, policy makers have still a lot of work on their plate as regards the design of an adequate regulatory framework for the “shadow banking sector” and for it to be sufficiently sound to be providing a sustainable “market based financing”. The Capital Market Union’s project launched by the European Commission is aiming at achieving to achieve a sound regulatory framework. To this end, for instance, the European Commission with the help of the European Banking Association (EBA) has recently defined criteria for Simple, Transparent and Standardized (STS) securitization.