A century ago we had banks. They created systemic risk. We decided to regulate them in order to limit the systemic risk they could create. That was wise.

Now we have non-banks. They create systemic risk...

I have long believed that our global financial system had some time back outgrown in size and complexity the monitoring tools available to the banking regulators in the US and abroad. Sooner or later, it was natural that this system was going to proceed to excess and have a major systemic crisis.

This looks like it.

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