Nevertheless, during the period of extreme market nerves, like other authorities we had to act rapidly to support system liquidity and banks’ ability to fund themselves, including by issuing government guarantees of bank liabilities. Regulatory responses Regulators worldwide have responded to the financial crisis experience with a large and ongoing programme of reforms.
Among the most important include strengthening requirements on banks’ capital and liquidity structures, and bolstering domestic and international financial supervision. Basel III is a key international process to facilitate the parts of these reforms focused on bank balance sheets. We do note, however, that not all the proposed reforms relate to problems in the Australasian banking system.