Another case in point is management remuneration, in particular, schemes that reward quick success with annual bonuses without penalising long-term adverse consequences of decisions that had been taken. Furthermore, accounting rules have come under scrutiny as regards procyclicality. While fair value accounting certainly has its merits, it amplifies the cyclicality of leverage.
And while I wish I could be publicly swept up by what former Fed Chairman Alan Greenspan famously called "irrational exuberance," in my button-down role as Central Bank Governor, I have to settle for "rational exuberance" instead!