More fundamentally, and looking beyond the immediate crisis, it is clear that the international community needs to work to close the many loopholes in the global regulatory architecture that allowed financial institutions to minimize capital even as they concentrated risk.
Look, if even the MD of the IMF gets this wrong then we\’re all doomed. Financial institutions did not concentrate risk. They dispersed it! That\’s what the damn problem is, the risk is all over the place and we don\’t in fact know exactly where.
When a German bank falls over because of problems in the mortgage markets in Florida and California, that\’s really not a concentration of risk, is it?