If firms lack the incentives for adequate self-regulation then the regulator must step in. This is the aim of our Rulebook requirements on corporate governance and internal controls. The financial crisis also points to the need for high standards of risk management in financial firms.
In response to elevated rates, the Federal Reserve began conducting repo operations to help stabilize money markets and provide reserves to keep the federal funds rate within its target range. These operations boosted reserves to levels averaging about $ trillion in early 2020.