BIS central bankers’ speeches  1  By the time financial stress began rising rapidly in the second half of 2007, systemic risk and financial instability had come to seem more theoretical than real to many regulators, academics, and financial market participants. There had been little in the way of Congressional discussion of systemic risk issues, and little in the way of well-developed recommendations.
To be sure, some academics – mostly finance professors – and a few intrepid, heterodox voices among central bank research staffs identified risks that might be building and, in general terms, the need for macroprudential regulation to complement traditional microprudential oversight. But even they tended more to diagnosis and warning than to prescription.