Yes. The investors who most want to lock in long-term margins tend to shun the risk of prices falling after a future policy revision, and to grow overly cautious about taking part in auctions. As a result, wariness in the market is growing, and the auctions aren't being absorbed. (N1 lesson 34)
Faced with elevated upstream costs, price pass-through into final consumer goods lags behind, showing an undesirable tendency to compress the margins of small and mid-sized enterprises. (N1 lesson 85)
Yes. When a financial crisis strikes, each bank's rational effort to avoid risk tends to cause a credit contraction across the whole economy, and to get in the way of sound economic activity. Left alone, the regional economy could sink into a chain of credit panic. (N1 lesson 112)
Yes. They borrow short-term without the backing of capital and invest it long-term, a dangerous liquidity transformation, and the swelling of their assets has reached a level we can't ignore. When a financial crisis strikes, capital tends to flee, to get around regulation, into the lightly regulated sectors, set off new latent risks there, and increase the vulnerability of the whole system. (N1 lesson 125)
In regional economies where capital demand is scarce, there is an undesirable tendency for lenders to neglect credit risk management in their rush to engage in reckless lending competition. It is no wonder concerns regarding the soundness of the financial system are mounting. (N1 lesson 10)
