Most importantly, the crisis has shown that market participants were not capable of mastering the inherent complexity of the system that they themselves had contributed to develop over the course of the last two decades. Favoured by the breakthroughs in information technology and telecommunications, the securitization of banks’ assets expanded considerably, together with the supply of so-called structured financial instruments (ABSs, CDOs, etc.).
As the nineteenth century unfolded, communications speeded up. By the turn of the century events moved more rapidly, but their speed was at most a crawl by the standard of today’s financial markets. The environment now facing the world’s central banks -- and, of course, private participants in financial markets as well -- is characterized by instant communication.