Finally, many risk-weights used in the Basel framework to determine the effective capital requirements were simply too low, as was revealed by the crisis. Lack of market discipline and the too-big-to-fail problem The increasing complexity of structures and products, and the financial sector’s increasing interconnectedness, along with growing size, led to reduced transparency of bank balance sheets.
Most notably, attention has focused on equity prices, the personal saving rate, the current account deficit, and debt burdens. The unifying theme among this class of imbalances is that they typically arise during an expansion, often as the result of changing attitudes toward the perceived risk in the economy or as a result of increased willingness to accept risk.