For example, the absence of a clear cross-border banking resolution framework in Europe conditioned the authorities’ initial response to the crisis in this field, which was initially hesitant and “national” in character.
The absence of a common rulebook for global financial systems exacerbated other weaknesses in the “put your house in order” category, including poor risk management by institutions and a generalised underestimation of risk, leading to an overextended financial sector. Global imbalances and negative externalities Excessive global imbalances 2 had a major role in creating the fragilities that led to the crisis.