The G7 authorities are prepared to concede that there were prudential issues involved in the high leverage of these funds – it threatened those who had lent to them. But there is less recognition of the market integrity issues involved – i.e.
The non-standard measures included granting banks unlimited access to central bank liquidity against an extended range of collateral with the possibility for banks to borrow liquidity at a broader spectrum of maturities, of up to 12 months. The ECB also intervened directly in some market segments that were dysfunctional, namely the covered bonds market. This was deemed important for the long-term financing of banks.