But unfortunately broad spectrum and generic regulatory and supervisory failure worldwide, especially in the West, precipitated the unprecedented global financial crisis.
The most no-holds-barred acknowledgement of this, though it came much later only recently, was when Donald Kohn, former Vice Chairman of the US Federal Reserve apologized by saying, “The cops were not on the beat, resulting in the worst economic recession and loss of millions of jobs.” This regulatory and supervisory inertia to unprecedented build up of risk globally, typical and characteristic, of the hunky-dory and gung-ho financial environment of the pre-crisis days, is most graphically epitomized by what Mark Twain said 100 years ago: “It ain’t what you don’t know that gets you into trouble; it is what you know for sure that just ain’t so!” As is invariably the case with any major crisis, the global financial crisis has unleashed a passionate debate over the design of a new global financial and regulatory architecture.