Standing up for the heads of major financial institutions is something akin to campaigning for the rights of mass murderers at the moment.

But tempting though it is to write off the last couple of weeks as the consequences of greed and stupidity, explanations that rely upon a belief in the shortcomings of a group of people are pretty unsatisfactory.

People respond to incentives. There is no law of nature that would result in all the greedy and stupid people being attracted to, and rising to the top of, the banking industry. So you have to assume that where the financial institutions went wrong was that incentives were misaligned, and there was a collective failure of leadership to see the writing on the wall.

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