For example, in the United Kingdom, Northern Rock’s heavy reliance on securitisation, and its inability to find an alternative source of funding when this market closed, was instrumental in its need for official support and subsequent nationalisation.
Similarly, disruptions to markets for credit default swaps, or even simple foreign currency swaps, had a significant impact on the operations of institutions that relied on these markets to hedge their exposures and manage funding. Globalisation has also been important, with much economic and financial activity increasingly organised on a transnational basis.