Although some authors, such as Kasriel (2004) and Rajan (2005), warned of increased risks before the problems arose, their admonitions were widely ignored. The fact that most authorities miscalculated the risks in the crisis is worrisome.
The inability to detect incipient problems and the time it takes for any economic policy to exert effects restrict the scope for corrective measures, where lags can even make them counterproductive. 9 In addition, even if detection were not a problem, authorities may be unwilling to implement policies to counter a likely imminent crisis.