A case for stronger regulation on liquidity

Securitisation's enhancement of and reliance on liquidity, as revealed by the recent bout of turmoil, indicates the need for new rules on liquidity, the Banque de France's latest stability review finds.

However the review also notes that bigger liquidity cushions might not be sufficient in crises as the potential demand for liquidity is almost infinite in those circumstances. Less uncertainty would be a better solution and could be brought about through standardising securitised products and

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