Sovereign bond market  Government bond markets have suffered during the ongoing banking crisis, especially as it turned into a sovereign debt crisis. They are no longer considered a homogeneous, risk-free asset class. Investors’ willingness to take risk diminished sharply. Volatility and liquidity became the most important topics for market participants.
The accelerated phasein of the U.S. LCR reflects our objective that large U.S. banking firms maintain the improved liquidity positions they have already built following the financial crisis, in part because of our supervisory oversight. We believe the LCR will help ensure that these improved liquidity positions will not weaken as memories of the financial crisis fade.