At the onset of the crisis it became soon clear that the international community had to work together closely to find a way out of it. It was the first lesson we learnt: before the crisis, governments, regulators, and the financial services industry had for years been affected, in more than one dimension, by a sort of collective and pervasive blindness.
The tremendous macroeconomic imbalances that had been accumulating for years, market developments also stemming from regulatory mistakes that had made regulators’ knowledge obsolete, the new and crucial role of intermediaries’ balance sheets for the transmission of monetary policy, were all phenomena that were either ignored or downplayed in their importance.