From the seemingly endless 3,636 word G-20 statement that addresses a few of the points we made the other day:

During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.

(We note that, despite its length, the diagnosis manages to omit some of the problems that government itself caused.) Doesn’t it seem strange that these problems — so easily seen in retrospect — drew such scant attention for most of the decade?

This entry was posted on Sunday, November 16th, 2008 at 12:57 am and is filed under business, China, Democrats, EU, General, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.