Looser capital won’t ease bond liquidity – SNB’s Rime
Central banker calls for counter-cyclical leverage ratio and scrutiny of funds’ role
Lowering bank capital requirements won’t bolster bond market liquidity and regulators should focus instead on the role of mutual and money market funds, says Bertrand Rime, head of financial stability at the Swiss National Bank (SNB) and a member of the Basel Committee on Banking Supervision.
In an article for Risk.net, Rime weighs in on the issue of liquidity in fixed-income markets, which has provoked a heated debate in recent years. Market participants say tougher capital rules have stifled
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