The dangers of `derivatives' were not unforeseen even as Warren Buffett said more than five years ago that these instruments were indeed `financial weapons of mass destruction'. The collapse of Lehman Brothers and the critical situation to which American International Group (AIG) led its stakeholders - after receiving $85 bn from the US government as an emergency loan during mid-September - lend credence Buffett's apprehension, and show how even the most affluent financial systems failed to read the simple process of evolution, operation and impact of such instruments.

The financial crisis, which led to the collapse of Lehman Brothers, has snowballed into a complex international financial mess. We now refer to this crisis as the `Great Storm'. Mark Gertler, a New York University Economist, who was associated with former Fed Chairman Ben Bernanke as a fellow academician, while speaking about this crisis remarked: "This now is the worst financial crisis since the Great Depression." The crisis laid bare the inefficacy of risk measurement parameters, also most importantly, the failure of decision-making processes in the financial world, and highlighted the need for continuing improvisations in the supervisory processes, the world over.

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