Interconnectivities and regulatory impact [62]

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Bullet points include: FSB (2013) indicates following main strands: Mitigating risks in banks’ interactions with shadow banking entities, e.g. scope of consolidation, treatment of large exposures, investment in equity of such funds. Reducing the susceptibility of MMFs to ‘runs’. Focus has been on imposing bank like capital requirements on constant (or stable) NAV funds and/or requiring them to convert to floating NAV funds, but different regulators have different preferences Improving transparency and aligning incentives in securitisation Dampening procyclicality and other financial stability risks in securities financing transactions, e.g. standards on data collection and aggregation, re-hypothecation, collateral valuation and management and policy recommendations on central clearing, bankruptcy law and haircuts (i.e. margins) Assessing and mitigating systemic risks posed by other shadow banking entities and activities

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