One of the flaws is the inability of the models to capture the market risk in their trading book positions, particularly under stressed conditions. This is sought to be corrected by requiring that the capital calculations be made on parameters calibrated to stressed conditions. 9.
Even the most independent, best equipped and highly reputed national central banks are hard put to perform their triadic task effectively in the new conditions of time and space. The new context has been created by the market, evolves in response to market forces and basically meets the needs of private interests.