Second, because losses in a tail event are much more likely to be correlated for firms deeply engaged in trading, structured products, and other capital market instruments, all such firms are vulnerable to accelerating losses as troubled firms sell their assets into a declining market. Enhanced capital requirements should take into account these costs.
Thus, the aim of  13  Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111–203, 124 Stat. 1376 (2010), Section 113 (a)(1). 14  Dodd-Frank Act, Section 165. 6  BIS central bankers’ speeches  financial stability capital standards is to reduce further the probability that the firm might fail under stress through a requirement to hold additional capital.