Accordingly the  BIS Review 157/2009  1  supervisors were no longer really in a position to challenge the banks’ complacent view of the security underlying the property loans they were making and of the threat to their survival. Of course, the first line of defence should have been – and must continue to be – the banks’ own directors and management.
It is these imbalances that generated  BIS Review 153/2008  3  easy liquidity and low interest rates which in turn encouraged under-pricing of risk and deterioration in credit quality. So, the debating issue is, can we prevent global imbalances from building up in the future? There is an argument that global imbalances are inevitable given the demographic profile of the world.