From a regulatory perspective, at least two lines of defence are needed to counter evolving risks. First and foremost, prudential standards must remain solid in the non-bank financial sector. But this alone will not be sufficient if risks evolve more broadly and across institutions.
4  BIS Review 58/2009  Chart 1: Rough mapping of events between US and Japan red bracket: major events, blue: monetary policy, yellow: fiscal policy, pink: bank rescues Japan  U.S.  4Q 1990 Commercial land price started to decline sharply First Policy Rate Cut July 1991 2Q 1992 20% decline in commercial land price in one quarter Aug. 1992 Jan. 1993  Feb. 2007 Sept. 2007 Oct. 2007  26% decline in ABX-HE (BBB) in one month First Policy Rate Cut 18% decline in ABX-HE (AAA) in four months Citigroup, BoA and JPMC announce plans for $ Oct. 2007 billion Master Liquidity Enhancement Conduit (to be abandoned in Dec. 07)  Govt.