Ten years after the crisis, the major financial sector reforms, called for by the G20 and coordinated by the Bank for International Settlements (BIS) and Financial Stability Board (FSB), are now mostly in place. Large banks are better capitalised, less leveraged and more liquid. The banking system is, therefore, more resilient to economic shocks.
With respect to liquidity, as previously noted, rapid asset growth can strain a bank’s liquidity position if its funding sources turn out to be unstable. As supervisors, we work with bankers to understand their liquidity planning process, their challenges around attracting deposits, and the risks associated with potentially relying too heavily on noncore sources of funding.