8  See William Cohan (2009) for a detailed account of the effect of the closure of the repo market on Bear Stearns. 4  BIS Review 111/2010  Now, having seen that history, banks stress test their resilience to a closure of short-term funding markets, because it is an event that is in the recent experience.
But what heretofore unconceived event will they be vulnerable to in the future? The answer, of course, is that is impossible to tell. So an important part of the solution from a regulatory point of view is to make the system as robust as possible to such events. Obviously one cannot make the system impregnable, nor would it be optimal to do so.