The worst economic and financial crisis since the Great Depression is causing significant changes in the global financial system.

Most of the traditional and shadow banking system in the US and western Europe has been seriously damaged and, in some cases, destroyed by runs on their short-term liabilities. Hundreds of non-bank lenders have gone bust in the last two years because their wholesale financing has dried up, while the structured investment vehicles and conduits that were a feature of the early period of the credit crunch have disappeared amid a decline in asset-backed commercial paper financing. Of the five major US investment banks, two (Bear Stearns and Lehman Brothers) have disappeared, one (Merrill Lynch) has been forced into a merger and the last two (Goldman Sachs and Morgan Stanley) have been converted into bank holding companies and subject to much tighter regulation.