For example, the Board’s enhanced prudential standards rule contemplates allowing multiple IHCs in cases where home country legal requirements inhibit the combination of certain bank and nonbank operations.
Governments did not have resolution regimes that could provide for an orderly resolution of a systemically important financial firm. Shadow banking--which was funding long-term assets with short-term wholesale liabilities--exposed the financial system to a systemwide liquidity run. Although we all lived through the fall of 2008, let me dwell for a moment on that frightening period.