Insufficient diversity in views could lead to the kind of turmoil that occurred in markets for longer-term Treasury instruments in mid-2003. In that case, unexpected increases in rates led a large number of similarly positioned financial institutions to seek to take the same side of transactions simultaneously.
Another recommendation is that participants properly understand the economic meaning of external ratings that are applied to credit risk transfer instruments, especially collateralized debt obligations or CDOs - as compared with ratings given to more traditional obligations.