For example, the latitude banks had in the disclosure of non-performing assets enabled banks to withhold information, perfectly legally, on the full extent of their problems. As a result, market discipline could only play a limited role. At the same time, measures available to regulators and supervisors were rather limited.
A bigger stick would surely have helped the authorities to persuade banks to take more decisive actions. Finally, in the late 1990's and early 2000's, various policy measures were introduced to better align the incentives of banks. They included the introduction of more precise standards for disclosure and prompt corrective actions by the FSA.