However, I believe that efforts to take such a macroeconomic perspective into account in a more systematic manner have been insufficient. BIS Review 168/2009  3  The second reason why I think microprudence alone is insufficient is that financial institutions’ incentives are greatly affected by macroeconomic factors.
On this point, I recall the famous remark made before the surfacing of the subprime mortgage problem by the then CEO of a major financial institution that “while the music is playing, you have to dance.” If, in the future, benign economic conditions similar to that time, namely high economic growth, low inflation, low interest rates, and low market volatility continue for a long time, would managers of financial institutions and investors choose different management and investment strategies?