Abstract

This paper intends to show that the origin and development of the current crisis is entirely consistent with Hyman Minsky analysis. The substantial inadequacy of the regulatory framework in controlling the massive innovation processes involving the financial sector in the last twenty years is the additional factor with respect to the classical Minskian pattern. An inherently unstable financial system grown without adequate rules could not but cause the most severe crisis in the last four generations. It is necessary to write new rules and we know what they must be: since April the Financial Stability Forum report has shown future courses of action. The application of the principles underlined in this report will bring about a radical change compared with the past.