This syndrome of too much of arcane rocket science and financial alchemy in the financial sector, almost entirely for its own sake to almost complete exclusion of the needs of the real sector, created a massive “financial sector – real sector imbalance” which, being, intrinsically unsustainable, culminated eventually into the now-all-too-familiar apocalyptic denouement, entailing cumulative global write-downs and credit losses aggregating US $ 2 trillion by banks and financial firms.
BIS central bankers’ speeches  1  As I observed in my speech, “Identifying Systemic Risk in Global Markets – Lessons Learned from the Crisis : Asian Regulators’ Views on what have they done to contain the building up of systemic risk and to prevent the recurrence of future crisis”, delivered at the 2nd Pan-Asian Regulatory Summit at Singapore, in September 2011, systemic risks in global markets can be best identified and measured by looking at some select key parameters which, between them, indicate the extent of asset bubbles and the corresponding under-pricing of risks and, therefore, it is not so much high volatility, which is the “effect”, that should be a cause for concern, as persistent and excessively low volatility, which is the “cause” and was the hallmark of the pre-crisis period.