BIS central bankers’ speeches  1  shift in the business model increased traditional banks’ connections to the shadow banking sector. 3 The increasing influence of investment banking oriented management culture also spurred the focus on short-term profits in commercial banking, reinforced by short-term performance based managerial compensation schemes.
There were also dramatic changes in the liability side of banks’ balance sheet before the financial crisis. The leverage of banking institutions had strongly increased and the average maturity of their own funding had shortened.