Overall, my assessment is that longer-range inflation expectations have moved up from a level that was consistent with trend inflation below 2 percent to a level that’s consistent with underlying inflation a little above 2 percent.
Stock market crash of 1987, Asian crisis of 1997, dotcom bust of 2000 and the latest and still fresh crisis of 2007 are some of the notable examples of risks going out of control and are reminders of the potential impact of mis-management of risk. Several factors, both macroeconomic and regulatory and supervisory have led to the crisis of 2007, of such large dimensions.