Background on crisis and emerging lessons Before I talk about the Committee’s response, I think it is important to provide some context as to how we have arrived at where we are today.
From a supervisory perspective, the main contributing factors that came together to form a perfect storm include: •  a large amount of pre-crisis, system-wide liquidity, which led to excessive risk taking;  •  inadequate measures to contain leverage, maturity mismatches, risk concentrations and the erosion of liquidity buffers over the credit cycle;  •  regulatory gaps, which left important segments of the financial system under regulated;  •  poor incentives in regulatory frameworks;  •  poor underwriting standards;  •  outsourcing of the due diligence process to the rating agencies; and  •  fundamental shortcomings in financial institution’s governance, of which the current risk management shortcomings are just a symptom.