A slightest problem with these banks and the entire financial system could come unstuck – this is what precisely happened during the crisis. 17. The next section deals with the numerous implicit support systems provided by banks for a well-functioning capital market. Capital markets’ linkage with banks 18.
Market based financial systems were supposed to have reduced the dependence of the financial system on banks. However, with increased market-orientation of bank balance sheets, banks emerged as the proverbial guerilla in the room.