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Are we underestimating changes in financial markets?

· Andrew Bailey, Governor of the Bank of England (United Kingdom)

Summary written by Dark Majestic in its own words · topics: financial stability

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· Andrew Bailey Wiki · Bank of England WikiAre we underestimating changes in financial markets?

ContextSpeech at the University of Chicago Booth School of Business in London; the Bank of England protects financial stability and watches the growing role of non-bank markets.

Why it mattersBailey warns that non-banks could amplify shocks and calls for system-wide stress exercises.

Problems raised
  1. Financial markets have changed greatly.
  2. Non-banks may amplify shocks.
  3. Firms misjudge each other's actions under stress.
Solutions proposed
  1. Run system-wide stress exercises.
  2. Improve risk management.
  3. Develop policies against systemic risks.
Read full speech on bis.org ↗

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