Regulators rely on banks to tell them what is happening
The central banks / regulators are forced (to a degree) to rely on the institutions that they are supposed to be regulating to tell them what is actually going on in the market.
Immediately related elementsHow this works
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The Global Financial Crisis »The Global Financial Crisis
Immediate triggers of the financial crisis? »Immediate triggers of the financial crisis?
Pathology in the Credit Default Swaps market »Pathology in the Credit Default Swaps market
Resources of regulators limited in comparsion to market players »Resources of regulators limited in comparsion to market players
Regulators rely on banks to tell them what is happening
Conflict of interest leads to imperfect information flow »Conflict of interest leads to imperfect information flow
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