Regulators are considering proposals to prevent banks from growing overly dependent on short-term borrowings ?? as was the case with Bear and Lehman. The idea behind the discussions is that capital alone is not enough to prevent a run on a bank that depends on the overnight markets for funding.
The US financial sector??s losses on large loans exploded over the past year, exceeding the combined losses since 2001, with hedge funds and other members of the ??shadow banking system? hit the hardest, according to an annual review by regulators.