scope of an intermediary ’ s liabilities may in turn provide reasons for varying applicable capital regulation among firms that are primarily identified as a particular type of intermediary. conceptual, institutional, and practical impediments to developing a single framework for capital regulation are doubtlessly insuperable for the foreseeable future. but regulators with mandates covering different kinds of intermediaries, including the federal reserve, must keep both sides of this perspective in mind. and, hopefully, regulators with a more focused responsibility will be sensitive to the ways in which their regulated entities have departed from their original liability structure. the additional point follows from the first. when concerns are raised about regulatory arbitrage or a level playing field, they are usually in the context of a similar asset being held, or a business activity conducted, by financial firms with different regulatory structures. my discussion today would suggest that attention must be paid to the liability structure of the different firms before deciding whether the asymmetric regulatory treatment is prudent or an invitation to the propagation of new financial risks. these two points underscore the fact that the question for regulators is not really whether capital rules developed for banks should be extended to nonbank actors. the basel standards have already evolved to take account of different forms of intermediation in the financial firms subject to those rules. the basel framework might itself be enhanced by further differentiation of capital and liquidity requirements based on the liability structures of firms. similarly, capital rules for intermediaries not subject to basel rules should be shaped by similar considerations. industry : “ enhancing risk monitoring and regulatory safeguards for the asset management industry, ” speech delivered at the new york times dealbook opportunities for tomorrow conference, new york, december 11. bis central bankers ’ speeches

organizations. but unlike real - time measures – where time will presumably be of the essence if those measures are to be effective – the adoption of structural constraints can proceed with the full opportunity for debate and public notice - and - comment that attends the rulemaking process. 5. migration of financial activities outside the regulatory perimeter must be closely monitored. whenever increased regulation of similar activities applies only to some firms, incentives increase for the unregulated actors to step up their engagement in those activities. the very considerable strengthening of capital, liquidity, and other regulations in the wake of the financial crisis has presumably created commensurately significant opportunities for just such a shift of activities toward firms not subject to prudential regulation. as more macroprudential regulations applicable to large financial firms come into effect, one can expect that market actors will be exploring possibilities for regulatory arbitrage. in the short term, the potential for migration outside the perimeter of regulated firms may be somewhat limited, precisely because of the dominance of large commercial banks in certain lending markets, of large broker - dealers in intermediation in securities markets, and the absence of ready alternatives to the major clearing and custody banks. but, if the arbitrage gains promise to be high enough, over time, unregulated market actors may find ways to, for example, deal directly with one another in some forms of securities financing. new kinds of firms, perhaps acting solely as agents, might be formed to facilitate these direct transactions between unregulated firms. it is for this reason that the federal reserve and our counterparts in other member countries of the financial stability board have been evaluating ideas for market - wide measures even as we move forward with steps directed principally at prudentially regulated firms. interest in broader, if not universal, regulatory charges on securities financing transactions has developed in recognition of the systemic risks that may develop if, for instance, only certain prudentially regulated firms must incorporate such a charge into their borrowing or lending activities. as we make more progress in reorienting the regulation of large financial firms toward more macroprudential objectives, we will need to watch carefully for such leakage of financial transactions. this concern returns us to the larger project of macroprudential regulation, which implicates a more complicated set of issues around legal authorities and institutional capacities for prudential regulation of markets, as well as firms. but it would be preferable to confront these issues now, before too much of this