Such liquidity was a mirage 7 created by distorted risk assessments and hidden cross-subsidisation across capital market activities. So even if we now legislate to prevent the risks we know, we will not abolish the risks we don’t know. On the contrary, the more we eliminate the obvious risks, the higher the conditional probability of experiencing a crisis stemming from a non-obvious source.
Nestor A Espenilla, Jr: Reflecting and acting on our immediate economic past, present and future Speech by Mr Nestor A Espenilla, Jr, Governor of Bangko Sentral ng Pilipinas (BSP, the central bank of the Philippines), at the Joint Meeting of Rotary Club of Manila, Rotary Club of Makati West, and Rotary Club of Forbes Park, Makati City, 4 January 2018.