The tougher capital and liquidity requirements, the higher funding costs that will stem from the BRRD (which increases the risk of liabilities other than deposits covered by protection schemes), and any direct limits to operations will decrease the supply of credit.
2  BIS Review 2/2005  In the wake of traumatic experiences in the 1970s and 1980s, the US regulatory framework was revamped to better prepare for future contingencies in the financial system. The enactment of the Federal Deposit Insurance Corporation Improvement Act (FDICIA) in 1991 marked a watershed in the regulatory context.