Who said this?:
For all the clever innovation in the financial system, its Achilles heel was, and remains, simply the extraordinary — indeed absurd — levels of leverage represented by a heavy reliance on short-term debt.
The real failure was a lapse into hubris — we came to believe that crises created by massive maturity transformation were problems that no longer applied to modern banking, that they belonged to an era in which people wore whiskers and top hats. There was an inability to see through the veil of modern finance to the fact that the balance sheets of too many banks were an accident waiting to happen, with levels of leverage on a scale that could not resist even the slightest tremor to confidence about the uncertain value of bank assets.
Answer? Mervyn King. This week.
He’s really got it in for banks. And rightly so.
Pity he has no apparent real idea what to do about it.