Another source of concern is the “shadow” financial system not previously subject to regulation. The G20 summit a year ago in London indicated the general commitment not to  38  BIS Review 82/2010  leave significant parts of the financial sector, such as investment banks, hedge funds, private equity funds and so forth, outside the regulatory perimeter.
BIS central bankers’ speeches  1  We saw how devastating this scenario can be in 2008, when Lehman Brothers became insolvent. In such cases, the state may have no option but to bail out the distressed bank in order to prevent an escalation of the crisis.