Fourth, the general microprudential approach that was used focused on individual, regulated entities, and not enough attention was paid to the sector as a whole or to risks from outside the regulated system. The fifth weakness was a hesitation to act quickly when the first signs of undesirable developments were detected.
This morning I should like to carry the analysis a bit further. Companies in Korea and many other Asian countries have become formidable world-class producers in a number of manufacturing sectors using advanced technologies, but in a number of cases they permitted leverage to rise to levels that could only be sustained with continued very rapid growth. Growth, however, was destined to slow.