This caused a gigantic deficit on the current account held with the central bank and a necessity of emergency support from the FED. The financial consequences of a computer system error were incurred not only by the Bank of New York, but also by many of its counterparties. Illing M. “A Review of Notable Financial Stress Events”, in: “Essays on Financial Stability”, Bank of Canada, September 2003. BIS Review 60/2006  banking system, and dilemmas regarding the crisis support and the deposit guarantee system. 44 The question whether the taxpayers of the host country, or solely those of the home country, should pay for possible bankruptcy of a bank, remains open. Conducting operations in various countries and segments of the financial market (including but not limited to combination of the banking and insurance activities) leads to creation of complex structures of financial groups. This phenomenon has been included in the banking supervision organisation. At the EU level, this fact is reflected in the Directive on supplementary supervision of credit institutions, insurance companies and investment firms in a financial conglomerate, 45 and in Poland – by the Supplementary Supervision Act. 46 The merit of the Act is a complex risk analysis within a single capital group and coordination of control and supervisory activities by a leading supervisor, with the collaboration of authorities that supervise other entities in the financial conglomerate. 47 The Act sets forth cooperation with foreign supervisors. Globalization of financial markets brings about new challenges for central banks as regards crisis management.

On the contrary, new barriers could be erected either in the form of capital controls or through national regulations forcing financial  BIS Review 76/2010  11  institutions to ring fence local pools of capital and liquidity. There would be little convergence in domestic financial systems and regulations. Foreign exchange reserves would keep growing, both in absolute and in percentage of world GDP. This scenario may be seen as the only realistic response to increased diversity in a multipolar world. Such an evolution could also be defended on the ground that the assumed benefits of financial harmonization and integration have not really materialized (Rodrik et al. 2008). Furthermore, the crisis has shown that no financial system can claim to be intrinsically superior and countries could feel justified in adopting and promoting their own models. The systemic consequences, however, are not clear. In such a world, current account imbalances would be heavily influenced by public actions and policies. Regulatory competition would dominate the localization of financial activities and the allocation of savings. In the absence of some “rules of the game”, tensions would naturally arise between countries, most likely through conflicts about exchange rate regimes and policies. An opposite scenario would see the progressive opening of all capital accounts, together with some (more or less intensive) convergence in financial systems and regulations. This would allow for the emergence of a unified world capital market, an efficient allocation of savings across countries and a smooth financing of current account imbalances.