Unusually large declines in equity prices and increases in defaults and risk spreads - surely tail events by most definitions - reduced wealth and raised the cost of capital but did not aggravate the downturn by impinging on the flow of funds.
Financial intermediaries were not so troubled as to cut off the provision of credit, and in any case, many borrowers had alternative sources of funds. In addition, we have not seen a clear upward trend in volatility of financial asset prices over the past twenty-five years, as one might expect if herding had increased in importance.