If you have to handle uncomfortable truths, go for the right ones.

Sir Philip Stephens in "Uncomfortable truths for a new world of them and us" May 30 blames the subprime mortgages turmoil on "the explosion in financial innovation made possible by ever more sophisticated information technology. This has… engendered among investment bankers and traders an insouciant indifference to risk". The real truth is much more uncomfortable than that.

The subprime mess has nothing to do with sophistication but with the fact that those who had been empowered by the regulators as supreme risk surveyors, the credit rating agencies, just did not do their job right finding out some very basic faults with the mortgages and that should have been easy to spot.

Stephens, referring to Washington consensus type of preaching to the developing world now tells us that in response to the turmoil the developed world must show the "willingness to see that this is a transformational moment that demands we look at the world entirely afresh".

He is right; and one of the issues on that urgent agenda must be to annul the dangerous paradigms that have taken over financial regulations. The first being that the only purpose of bank regulations is to avoid a bank crisis, when there is so much more to banking than that, and the second, the one that relates to the uncomfortable truth above, that it tremendously unwise to delegate so much regulatory risk surveillance power in some few agents that, as humans, are bound to err and take us over ever more dangerous precipices.