The problems of maturity mismatch in the conduits or structured investment vehicles (SIVs) created by the banks for purposes of securitisation manifested themselves in a sudden spurt in demand for liquidity from banks to meet their liquidity support obligations to the SIVs or to fund the assets of the SIVs that were taken on to their balance sheets.
It is now realised that the relevant banks have leveraged excessively and had not fully recognised the risks or had seriously underpriced them, thus warranting large capital infusion. Uncertainty about the possible losses yet to be disclosed by several of them has not yet ceased.