I don’t see the logic in not learning from what happened elsewhere rather than waiting to learn the lesson painfully ourselves. Learning from others’ mistakes is a lot less painful approach to life. As the past few years show, the financial system is just that, a system, as Rod Maddock and Peter Munckton’s paper highlights.
It is also a set of markets where there is demand and supply and a market-clearing price. As the system evolves and is stressed in different parts, other parts of the system adjust. As supply and demand changes, the price adjusts. Does this always happen seamlessly or painlessly? No.