Activation bears important consequences for banks. Therefore, such a measure must be taken with legal certainty. Thorough investigations were necessary and meant observing the financial system over a longer period of time. All the available evidence needed to be gathered and carefully assessed. Its cumulative weight had to be substantial to warrant action.
They expected that, when cash liquidity was needed, they could promptly sell such assets regardless of the complexity or the size of the market. This led to a further build-up of liquidity risks. 4  BIS Review 60/2009  Second, understanding the mechanisms through which leverage builds up and the impact of the unwinding of such leverage is essential.