Moreover, exacerbating this liquidity squeeze, many of the largest institutions were unable to unwind positions that they had assumed could be liquidated even in stressed markets. BIS central bankers’ speeches  1  The crisis thus revealed capital and liquidity shortfalls and confirmed that weaknesses in one group of internationally active firms could quickly be transmitted globally.
In response, national prudential regulators represented on the Basel Committee on Banking Supervision have developed new standards to enhance the stability of the global financial system. In July 2009, the Basel Committee adopted more stringent regulatory capital standards for trading activities and securitization exposures. Subsequently, in December 2010, the Basel Committee published its Basel III framework.