In other cases, banks did not price liquidity appropriately throughout the firm, and correcting risk management deficiencies will in turn improve liquidity profiles. In fact, the initial response we have observed in some countries that have already implemented comparable liquidity ratios suggest that these are the types of strategies that are being pursued.
Effects of Basel III on financial markets Since the new regulation will change the behaviour of banks, it will also have wider effects on financial markets. The effects in the transitional phase will be different from the effects in the new steady state.