As we look forward, it is important to reflect on the past to see what if any lessons we can learn. The onset of the financial crisis in 2008 has been much discussed in the last few weeks.
The years leading up to the financial crisis were characterised by, inter alia: high levels of financial innovation; an over and incorrect reliance on implicit and explicit assumptions; the approach to regulation and supervision failing to keep pace with the growing systemic risks; and boards and senior managers not truly understanding the risks and, in many cases, the underlying activities being undertaken in their businesses.