After acquiring General Re in 1998, Warren Buffett, the veteran investor, learnt the hard way that “derivatives are like hell, easy to enter but almost impossible to exit”.

Four years later, Mr Buffett, chairman of Berkshire Hathaway, argued that highly complex financial instruments and derivatives were time bombs and that these “financial weapons of mass destruction” might harm the econ­omic system. His caution was prescient – like that of many others who have identified company frauds or diagnosed previous credit cycles gone wild. Yet most of these gloomy messengers have been ignored. Since Mr Buffett’s warning, financial markets have imploded and policymakers have failed to address the abuses that created the crisis, from the excess leverage of banks to ratings agency failures.