This weakness may be partially explained by the supervisory approach embedded in the Gramm-Leach-Bliley Act, with its emphasis on the functional supervision of affiliates in a holding company.
But it was also the case that not  BIS Review 140/2009  3  enough supervisory scrutiny was given to the risks associated with securitization, the common exposures of different affiliates, and the implications of the explosion of off-balancesheet assets.