This is the same methodology as Oxera (2011) with a downward adjustment for the risk free rate to the nominal yield on 1-year UK gilts and considers that support can be realised at any time during the year. The figure for global banks is an estimate based on the UK figures. (b) Calculated by comparing the difference in funding costs calculated as an annual average for individual banks, based on the difference in the average funding cost of benchmark financial institutions rated at the support rating and the average funding cost for financial institutions rated at the standalone rating. This difference is then multiplied by the rating-sensitive liabilities of the bank or building society. Data availability for non-UK banks is less granular. BIS central bankers’ speeches  25
In my view, regulatory issues relating to the profusion of financial innovations that emerged during the last boom episode should now rank high on the agenda. Indeed, regulatory lapses seem to me to lie at the heart of the subprime crisis, which appears to many as a “credit boom gone bad” 5 . Recent research by Dell’Aricia, Igan and Laeven (2008) shows for instance that delinquencies in the US subprime mortgage market are statistically larger in areas that experienced larger increases in the number and volume of loans, because the latter was linked to a decrease in lending standards. In turn this deterioration in lending standards by banks can be explained by changes in market structure (with the entry of new aggressive competitors) and the increasing recourse by banks to asset securitization and loan sales. BIS Review 37/2008  5