It should also be recalled that there had been some anxiety that disruptive asset price dynamics could have been triggered by an idiosyncratic collapse of a large hedge fund. However, the plunge into financial distress in September 2006 of Amaranth Advisors had little discernible impact on markets.
Attention is paid both to the inefficiencies of the State and to those of the market. In monetary policy, this explains recourse to unconventional measures; in banking supervision, it explains the effort to achieve an equilibrium – which does not mean laxity – between microprudential intervention at individual institutions and macroprudential considerations relating to the overall stability of the financial system.