As we know, markets can be unforgiving of such surprises, and boards of directors often follow the market signal and punish the top management thought to be responsible for failure. An obvious difficulty is the inability to predict which merger will be successful, with the winners not just cost-cutters but those who know how to develop new sources of revenue.
Regulatory capital ratios for banks and insurance companies remain high, which, as previously mentioned, would mitigate fire sales and their effect on the solvency and functioning of these institutions. Leverage at intermediaries is much  -9reduced relative to pre-crisis norms, and gross leverage at hedge funds, based on the partial information available, has not changed much in recent years.