The U.K. initiative in applying local liquidity requirements is wholly understandable in light of the difficulties encountered because of stress on foreign institutions, including the Lehman bankruptcy, during the crisis.
Because London is one of the world’s two largest financial center hosts, the United Kingdom is the only country other than the United States hosting numerous, very large broker-dealers that are owned by foreign banks and also a broad array of commercial bank subsidiaries and branches that are owned by foreign banks.