But the economy has drifted to a higher level of vulnerability lately. The matrix of deficit and debt, wage levels and interest rate levels, growth, current account deficit and regulatory policies is a conundrum of our time – a Rubik’s cube of tricky policy moves.
Until recently, regulatory and supervisory systems were designed to retrospectively identify at what point in time, so to say, a thief stole your money, not to alert you when he is actually stealing it. The rogue banker could beat the system and beat the house as well. A bad bank anywhere can affect good banks everywhere.