ERM Frameworks and Responses to risk [44]

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Bullet points include: Worry that money would stop being viable ‘medium of exchange’ most vexed policymakers, so changes focused on banks and involved: (1) Enhance capital adequacy – both quantum and methodology (2) Ring-fence activities subject to deposit protection schemes (3) Have existing investors carry more of the burden of a firm failure (4) Make resolution of failing firms easier (5) Change business behaviours Implications for others: market structure and regulatory focus, e.g. central counterparties, credit ratings, liquidity risk, structured vehicles, and increased focus on capita tiering

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