Current crisis – perimeter issues As mentioned earlier, the origins of the current crisis lay within the heavily regulated institutions. The impact of the crisis, however, was exacerbated by dynamic interconnectedness between entities across regulated, unregulated and lightly regulated  BIS Review 75/2009  1  sectors.
As some of the recent reports have pointed out, the two concerns relating to “outside perimeter” entities that contributed to the current crisis were: (i) maturity transformation being undertaken by these entities, which traditionally used to be a function of banks; and (ii) the systemic leverage resulting out of the hugely leveraged positions of these entities, either through direct borrowing from banks or through the funding markets.