The rapid unravelling of the US subprime mortgage market reminds us of the adage that history repeats itself: many of the sad excesses of today's subprime market are but an echo of the costly savings and loan crisis of the early 1980s. Perhapshistory will have taught the American taxpayer to resist vigorously picking up the bill, which this time around could prove even more costly than the earlier S&L meltdown.

At the heart of today's subprime crisis is the unfortunate interaction of financial innovation gone awry, inept market regulation and a failure of the rating agencies to exercise their fiduciary responsibility to protect the average investor.