IDEAS home Printed from https://ideas.repec.org/a/bfr/fisrev/2021244.html
   My bibliography  Save this article

Lessons From Covid: A Macroprudential Framework For The Market-Based Finance Sector

Author

Listed:
  • Gabriel MAKHLOUF

Abstract

The shock from Covid-19 – although not originating from the financial system – represents the greatest challenge for the financial system since the global financial crisis (GFC) more than a decade ago. Entering this crisis, the banking sector was in a more resilient place due to reforms since the GFC. But the financial system overall has changed significantly due to an increase in the share of financial intermediation accounted for by parts of the non-bank financial system, in particular by investment funds. The financial dislocations observed at the onset of the Covid-19 shock have highlighted some vulnerabilities in the non-bank sector, and particularly for money market funds and open-ended funds with short redemption periods and exposures to less liquid assets. A key lesson to draw from this shock is the need to develop and operationalise a macroprudential framework for market-based finance. This would be beneficial for the sector as a whole as well as for the stability of the financial system.

Suggested Citation

  • Gabriel MAKHLOUF, 2021. "Lessons From Covid: A Macroprudential Framework For The Market-Based Finance Sector," Financial Stability Review, Banque de France, pages 29-38, March.
    • Handle: RePEc:bfr:fisrev:2021:24:4
    as

    Download full text from publisher

    File URL: https://publications.banque-france.fr/en/financial-stability-review-no-24-march-2021
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bfr:fisrev:2021:24:4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael brassart (email available below). General contact details of provider: https://edirc.repec.org/data/bdfgvfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.