Central bankers probably will not like to be compared to witches, but for my money the best account of how the financial crisis came about is in William Shakespeare’s Macbeth. Banquo warns Macbeth to be wary of the witches’ implied promises:

And oftentimes, to win us to our harm,
The instruments of darkness tell us truths,
Win us with honest trifles, to betray’s
In deepest consequence.

Before the crisis, our latter-day ‘instruments of darkness’ also told us truths and won us with honest trifles; they