How did regulators mess up so badly? That's a question that many have been asking in recent months. For as the financial crisis has unfolded across the western world, the only thing more shocking than the sheer magnitude of the banks' losses is that so few bank regulators realised that anything was seriously amiss - until after disaster hit.rnOver in America, for example, Ben Bernanke, Federal Reserve chairman, was still insisting even after the crisis started that America's subprime problems would be 'contained'. Here in London, the British authorities repeatedly declared that the UK banking system was well capitalised - echoing a line across the western world, right until the banks started to collapse.
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