As long as the configuration of returns generally mimicked their historical patterns, LTCM’s mathematical BIS Review 77/1998  -2-  models of asset pricing could be used to ferret out temporary market price anomalies. Their trading both closed such price gaps and earned an extra bit of return on capital for them.
These liquidity enhancing measures include the reduction in bank reserve requirements by two percentage points and an increase in our peso rediscounting budget from P20 billion to P60 billion. This helped sustain bank lending at double-digit growth rates. At the same time, continued reforms implemented as lessons learned from the past have kept the Philippine banking sector stable through the ongoing financial turmoil.