Even in countries where the direct impact was limited, significant indirect consequences were experienced due to the subsequent global economic downturn. Page 8 of 13  This proved that more stringent supervision is not necessarily sufficient to appropriately safeguard the resilience of the global financial system and that inadequate powers to deal with financial failures pose a financial stability and a fiscal risk.
The failure or distress of financial institutions as well as the possible spillover effect that these failures can have on the wider economy is something that all countries are exposed to. History has also shown that disorderly bankruptcies lead to uncertainty, which in turn leads to a disruption in financial markets and a sharp fall in bank equity prices.