As in the United Kingdom, a principles-based approach is not inconsistent with the use of rules, which can provide needed clarity or a safe haven from legal and regulatory risks. However, rules should implement principles rather than develop in an ad hoc manner.
As investors shed some of their assets and corporates scrambled for cash, there was a risk that mounting liquidity pressures would amplify market stress and lead to a wider loss of confidence. Timely interventions by central banks helped to contain the stress and calm financial markets.