Significant write-downs of overstated asset valuations have resulted in the failure of a number of finance companies and depository institutions. Similar problems have occurred due to overvaluations in nonbank trading portfolios that resulted in overstatements of income and equity. As you are aware, the possibility for management bias exists today.
We have seen that European policy-makers have lived up to their responsibilities and acted in a swift and concerted manner. At the same time, we have to acknowledge that we are going through a phase of necessary adjustment after a period of excessive risk-taking in the global economy.