The premium on liquidity in the interbank markets shot up. The impossibility to roll over short term financing forced banks and special purpose vehicles to dispose off assets. In order to regain public confidence and create buffers against further unexpected losses, the financial sector strove to maintain or even raise capital ratios.
Reasonable from an individual point of view, the collective effort to reduce leverage pushed asset prices further down, provoking additional rounds of write-downs. In the first phase of the crisis turmoil was relatively contained in the financial sector and real growth held up reasonably well, especially in the emerging economies.