We failed to learn from earlier crises. We should have learnt that the modern financial system with its deregulated markets, highly leveraged players and large capital flows was dangerously fragile. We should have seen the crisis incubating behind the dazzle of financial alchemy. We should have noticed the regulatory systems getting lax and behind the curve. Instead what happened was just the opposite.
Although corporate financing via the capital markets and government financial institutions continues to expand, the increase in overall corporate financing seems to indicate a clear slowdown under the stagnant economic conditions. Banks remain cautious in extending loans with a view to improving their medium-term profitability and financial soundness.