Liquidity risk is top issue: Luxembourg's Mersch
In the wake of the recent banking crisis, the most important regulatory issue is ensuring that the liquidity risk relating to complex structured products is adequately assessed, according to Yves Mersch, the governor of the Central Bank of Luxembourg.
Mersch said: "Special purpose investment vehicles and conduits were used as off-balance sheet investment vehicles. These were prone to liquidity mismatches between their assets and liabilities, causing contingent credit and liquidity lines to be
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