Banks were not immune to the financial market stress of this period, but they were far less involved in the unfolding of the crisis than were nonbanks – a phenomenon that highlighted the importance of the nonbank sector and the vulnerability of the financial system to its distress. When nonbanks pulled back, other parts of the system suffered.
When nonbanks failed, other parts of the system failed. Regulatory reforms implemented in the wake of the financial crisis A crisis as deep as the Global Financial Crisis was bound to produce widespread regulatory changes. It was clearly necessary to strengthen the banking system and to better analyze and understand the importance of the links between the banking sector and the nonbank financial sector.