Moon Kil Woong

End of an Annus Horribilis for Finance

I disagree, the author is right that Base I rules allowing off balance sheet accounting encouraged banks to do things that made a lot of accounting sense but not a lot of common sense. Also coupled with a extermination of the depression era Glass Stegal laws banks, brokerages, and insurance companies were able to precipitate the same toxic mess that the laws were made to prevent.

Although, yes, if everyone remained prudent, financial catastrophe wouldn't happen. But if you look at the mindset of Wall Street the past few years, you would realize that would be the same as expecting termites to eat only the unnecessary parts of your house and not touch the support beams.

Why did the scorpion sting the dog helping it cross the river? We all know why now...