As I have spoken about previously, this loss of trust elevates prudential risks and contributes to poor consumer outcomes3. The underlying causes of the financial crisis have been much covered4 in recent months, so I will not spend time on them today. There are a myriad of examples of misconduct. The tracker mortgage scandal in Ireland is the largest and most recent local example.
I would like today to address the distinctly interesting individual elements of the build-up of risk and some elements of the associated financial innovations – key components of a bank’s business model. If a business model can be regarded as a bank’s genetic code, the business models of banks and intermediaries make up the DNA of the financial system.