But this crisis has shown, together with the lack of private sector discipline and weaknesses in the regulatory framework, some novel interrelations that call for action on all these fronts concurrently, and this further complicates our tasks. And yet, as we develop responses to these challenges, we also need to step back and consider how we have arrived at where we are.
At a very general level it is now becoming apparent that the transformation undergone by the financial services industry in the last few years has not been fully appreciated in its implications for monetary and regulatory policy making. As was well said by Adrian and Shin in the paper presented this morning, this has been the first post-securitization crisis.