Estonia has been a relative hotbed of activity on deliberative decision-making in practice. Each of these experiments used slightly differently approaches. This has provided useful case law on which to decide what works and when. One interesting finding is that citizens’ panels can be effective not just in getting people to engage on issues of national or regional importance, but in providing an effective forum for people to change their minds, and converge in their opinions, on these issues. They can reduce polarisation. These benefits lie at the heart of the deliberative democratic process. A second lesson is that technology is a potential game-changer for deliberative decision-making. This relies on a distributed, modular structure. Historically, structures such as the size of the boule placed physical constraints on the scope for information-making and debate. Digital structures loosen those constraints, allowing longer reach and greater connectivity at greater speed. Some countries have begun using digital technologies to support their deliberative processes, including here in Estonia. The benefits of doing so are partly practical, with greater numbers of people able to connect and communicate than ever previously. The public assemblies of Ancient Greece brought together people in their thousands. Today, technology could do so for millions of people. There are also, however, behavioural benefits. The “trust shift” among the public means credibility and understanding is more often these days built through distributed means and direct connections. A digital infrastructure can help those ends meet. It could be argued that these country-level experiments are just that – experiments.

), which have increased their exposure to risk transfer instruments, even though their investment policies remain fairly conservative. Third, banks themselves may, via credit derivatives, improve their risk management. They diversify their risk profiles by gaining exposure to companies or sectors in which they do not have customer relationships and by hedging risks while retaining customer relationships. Credit risk transfer mechanisms are also used by banks to deal with single-name concentration risk. Consequently, major improvements in risk measurement have been made. From a prudential viewpoint, the Basel II framework takes better account of risk mitigation techniques employed by banks, including the use of credit risk derivatives, and applies specific treatment to securitisation. BIS Review 33/2007  1  2. But this evolution should make us more – not less – vigilant regarding the assessment and tracking of risks. The wider benefits that CRT can bring should not give rise to a false sense of security. Risks do not disappear as a consequence of their transfer. Banks need to pay attention both to "residual risks" (e.g. tail or extreme event risks) and all of the risks (e.g. operational risk, documentation and settlement risk, legal risk) arising from the use of CRT. Furthermore, the growing complexity and volume of CRT transactions call for enhanced monitoring. Actually, understanding where risk ultimately lies and how risky exposures can build up is an essential prerequisite for safeguarding financial stability. The argument is fourfold: First, historically low interest rates and abundant liquidity have prompted an intense search for yield.