Tighter credit conditions and the increased difficulties that businesses faced in trying to raise funds have, in turn, contributed to the slowdown in the world economy. Another contributing factor was the drop in consumer confidence triggered by the wealth destruction that resulted from sharp falls in equity markets and housing prices.
The combination of these factors has produced extremely volatile and  BIS Review 148/2008  1  difficult financial conditions, and what has become the deepest, broadest, and longest financial crisis since the 1930s. In response, governments and central banks around the world – including the Bank of Canada – have undertaken a series of unprecedented actions aimed at stabilizing the financial system.