ERM frameworks [44]

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Bullet points include: Mutation of securitised credit model. Massive growth, increased complexity. Risk retained on banking balance sheets. Increased leverage. Increased maturity transformation, by banks and shadow banks. Reliance on “liquidity through marketability”. Misplaced reliance on apparently sophisticated maths. Hard-wired pro-cyclicality, e.g. ratings triggers, margin calls and lack of counter-cyclical capital buffers

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