Costs of intervention remained opaque; host country authorities did not have the incentive to provide liquidity support because of EU ring-fencing prohibitions; home-country authorities delayed provision of information or taking crisis-management actions to avoid capital losses, reputational effects or political backlashes; the home authority did not always have the incentive to keep host authorities reasonably informed.
Finally, given that crisis resolution is fundamentally national, countries’ approaches to financial institutions’ failure vary. Most countries have only a few bank-specific regulations; instead, general commerce bankruptcy laws often apply which delays the process of dealing with insolvent banks, even prohibiting in some cases their recapitalization.