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By Thierry LPEZ (picture), Partner, Risk Management Services Leader, PwC Luxembourg, Emmanuelle HENNIAUX, Partner, Regulatory Compliance Advisory Services Leader, PwC Luxembourg and Jean-Philippe MAES, Senior Manager, Basel II / III expert, PwC Luxembourg
There are many factors that led to the build up of the crisis. At the top of the list is excess liquidity, resulting in too much credit and weak underwriting standards. The vulnerability of the banking sector to this build up of risk in the system was primarily due to excess leverage, too little capital of insufficient quality, and inadequate liquidity buffers.
Stefan Walter, Secretary General, Basel Committee on Banking Supervision, 3 November 2010. In...
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