4  BIS central bankers’ speeches  These types of temporary surges in risk aversion can be very costly for society. At least in principle they can be ameliorated if there is an entity that has a stable risk appetite and that is prepared, and financially able, to play a stabilising role.
This was what happened in Australia during the crisis, where the Australian Government was prepared to insure bank debt for a fee. The fee was considerably higher than what the market would have normally demanded for providing such insurance, but was substantially less than the near infinite fee that the market was then implicitly charging.