Financial stability measures are actions and policies implemented by authorities to mitigate systemic risks and maintain the smooth functioning of financial markets. These measures aim to prevent disruptions that could negatively impact the broader economy. They include capital requirements, liquidity rules, and macroprudential tools. The objective is to ensure the resilience of the financial system against shocks.
Context
The emergence of digital assets and decentralized finance has introduced new considerations for financial stability measures, prompting regulators to assess potential systemic risks. Discussions focus on the interconnectedness of digital asset markets with traditional finance, the volatility of certain crypto assets, and the potential for runs on stablecoins. Future developments will likely involve integrating digital asset market surveillance into broader financial stability monitoring and potentially introducing specific regulatory safeguards for large or interconnected crypto entities.
Transatlantic regulatory arbitrage risk diminishes as CFTC considers MiCA equivalence, mandating a pivot to integrated, global compliance architectures.
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