The deep crisis was, then, a crisis of the ideas that had made these instruments and institutions possible. If you believed the new instruction sheet, shadow banks served the real banks by augmenting liquidity and assisting risk transfer. Derivatives made the system safe by making it possible for individuals to sell risk to those willing to buy it, who were presumed to be best suited to hold it by virtue of wanting to purchase it. And the banks themselves, those with skin in the game, were assumed to be the best people to judge the risks they were taking using models they designed themselves, even if it turned out after the fact that the problem was precisely that the banks didn’t have skin in the game since they were moving everything they could off book into SIVs.

Mark Blyth, Austerity, loc. 132