But much of this trust has evaporated.” The Group concluded in its review that there have been real and important supervisory and regulatory failures. They suggest two initiatives to repair the supervisory and regulatory system within the EU.
Financial markets in particular have become integrated to such a degree that a small distortion at one end of the world can quickly spread and affect the entire system. In 2008, the failure of a single investment bank in the United States caused a global financial crisis and a worldwide recession. Such banks are usually referred to as “too big to fail”.