Actions by home-country authorities during this period showed that while a foreign bank regulatory regime designed to accommodate centralized management of capital and liquidity can promote efficiency during good times, it also increases the chances of ring-fencing by home and host jurisdictions at the moment of a crisis, as local operations come under severe strain and repayment of local creditors is called into question.
(2011), “Unconventional Monetary Policy in Theory and in Practice," Questioni di Economia e Finanza 102, Bank of Italy. 2  Brunnermeier, M. K. and Pedersen, L. H. (2009), “Market Liquidity and Funding Liquidity”, Review of Financial Studies, 22(6), pp.2201–2238.