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
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Immediate triggers of the financial crisis? »Immediate triggers of the financial crisis?
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Pathology in the Credit Default Swaps market »Pathology in the Credit Default Swaps market
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Resources of regulators limited in comparsion to market players »Resources of regulators limited in comparsion to market players
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Regulators rely on banks to tell them what is happening
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Conflict of interest leads to imperfect information flow »Conflict of interest leads to imperfect information flow
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