Once in a life-time crisis warranted a commensurate response in terms of a major overhaul of the financial system involving almost everything from regulation to risk management to mergers / acquisition to capitalization to executive compensation to financial engineering to governance. 5.
In this connection, interface between banks and financial markets, has undergone a fundamental shift in the recent times – banks have become intricately linked to financial markets and hence more vulnerable to financial markets stress. At the same time, functioning of markets has become intricately linked to banks which then emerge as the carrier for most of risks within the financial markets.