Do not ignore that bank regulators have played the leading role in finance over the last fifteen years.
There is nothing wrong in Gapper’s recounting of the story but strangely and like most or perhaps even all of his colleagues in the Financial Times, he does not mention the crucial role played by the banking regulators from Basel, who started it all by quite arrogantly thinking they could drive banking risks out of banking.
Well, the bank risks did not disappear; they went into hiding, just like any overly regulated business normally goes underground; and let us now pray that in this hide and seek game the world has not accumulated too many bank losses that it has lost track off.
I mention all this because if we are going to be able to handle some potentially very dangerous circumstances that might loom around the corner, we cannot afford to leave out the analysis of were the regulators went wrong, even though they are among the most respected citizens of our society, because it might be precisely in that area that we need to do a lot of fast and swift backtracking. As an example one of the first things that need to be done is to strip the credit rating agencies from much of the immense powers allocated to them by the regulators… as that can foreseeable only lead the world into worse and worse scenarios.