Firstly, the financial failures of 2008 which followed the sub-prime crisis clearly illustrated the need for a wider coverage of the financial sector beyond commercial banks and for stricter coverage of the financial entities which actually were regulated. In terms of the existing regulations, capital criteria were inadequate.
Indeed in the financial meltdown many banks had to be recapitalized by Government and by the private sector. Yet many of the impact studies of the Basel II guidelines which had been conducted up to that time, had shown that for developed country markets the Basel II guidelines would have led to lower capital requirements for most banks.