BlackRock recently published a "Viewpoint," tiled, "Pressure Valves: Relieving liquidity stress in capital markets." They write, "​As a fiduciary helping millions of people around the world save for retirement and access a wider range of investment opportunities, BlackRock firmly believes that strong, well-​functioning capital markets are essential to economic growth and financial wellbeing. Strong, resilient market structures are critical to ensuring that capital markets can effectively serve savers, economies and societies by channeling savings into companies, infrastructure, and innovation, creating opportunity for investors and communities alike. Almost two decades have passed since the Global Financial Crisis (​GFC). Today, thanks largely to post-​crisis reforms, core financial institutions and capital markets are significantly more resilient. The shift to central clearing and collateralisation of risk in derivatives markets addressed the opacity and counterparty risk exposed during the crisis. Meanwhile, changes to banks' capital and liquidity rules have enhanced the resilience of their balance sheets." BlackRock continues, "​These reforms have now been tested through multiple market cycles and withstood the normalisation of monetary policy. But while undoubtedly effective on their own terms, a side-​effect has been a shift from counterparty risk to liquidity risk at the system level. Today'​s market structure hard-​wires system-​wide demand for cash and market volatility together. Greater use of margin and collateral calls means market participants are better protected from counterparty defaults but instead face the challenge of sourcing liquidity during stressed market conditions. Meanwhile, the banking sector is less able to hold risk, make markets, and move cash through the system. Taken together, this creates a potential imbalance between liquidity demand and liquidity supply." The paper states, "The challenge for policymakers and the financial ecosystem is to preserve the benefits of the post-​GFC regulatory settlement, while mitigating the risks it has exposed. But, crucially, measures should not undermine the ability of capital markets to generate growth: seeking resilience by holding ever higher cash buffers reduces returns for end-​investors, and means less capital being invested productively into economies. Instead, we see an opportunity to enhance the functioning of markets by developing what we term '​Pressure Valves', making improvements to collateral markets, repo markets, and harnessing the benefits of emerging technologies to upgrade market structures."

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