Indeed, the ECB, in particular in its Financial Stability Review, as well as other central banks and international institutions, had issued repeated warnings about the potential underpricing of risks in a number of markets, including the US sub-prime mortgage markets.
For instance, in my speech before this Committee last year, I noted that the unabated growth in the volume and complexity of new financial instruments could have made these markets vulnerable to disruptive adjustments, as it was not always clear where the risk exposures ultimately lay.