Promoting financial stability The crisis is rooted in distortions in the markets’ functioning, regulatory and supervisory shortcomings and the conduct of intermediaries in the world’s leading financial centres.
The exceptional liquidity that flowed into those centres as a result of the prolonged disequilibria in savings rates and payments balances contributed to keeping interest rates, volatility and the cost of protection against insolvency at abnormally low levels. This led to a general underestimation of risk with a consequent overvaluation of financial assets and real estate.