There is no doubt that this is a financial crisis sparked by excessive, indeed aggressive, lending of money to house purchasers without appropriate documentation being completed and without appropriate controls. This is a subject covered by banking regulation in most countries and the miscreants can - and must - be dealt with by the appropriate regulatory authorities.

The establishment by many banks of "off-balance sheet" entities such as "Special Investment Vehicles" (SIVs) was, in my opinion, done specifically to avoid, if not evade, judicious banking regulations. Such regulations were designed by government related entities to reduce the risks to the banks, their depositors and their shareholders in the event of a financial crisis. By deliberately seeking to avoid/evade such regulations, the banks have opened themselves to lawsuits from shareholders as well as, perhaps, to punishment by regulators in that their directors may have not conducted their business in "a fit and proper manner". Again, punishment must fit the crime.

The above-mentioned aggressive lending for house purchase has been exacerbated by the conversion of such loans (often via derivatives) into investments which were highly rated by the Agencies. However, institutional investors are - or should be - brought up on the principle of "caveat emptor", let the buyer beware. It is not appropriate for such investors to try to pass the blame elsewhere; they are the ones with fiduciary responsibility for the investment of their clients' money.

On the subject of derivatives, we can apply the same principles as above. Regulations exist to limit the use of these instruments and their effect on a bank's Balance Sheet and Profit & Loss Account in the event of a crisis. If these regulations have been broken, again punishment must follow.

But let us not confuse the message with the messenger. Derivatives have permitted individual home buyers to obtain fixed rate mortgages at sensible interest rates in recent years. This has been very beneficial to them in enabling them to plan ahead their personal budgets in a sensible manner. Manufacturing industries around the world use derivatives to reduce the risk of adverse movements in foreign exchange rates. Both techniques use derivatives to reduce risk that is inherent both in business and in our personal lives.

The fact that the world's banks have sought to increase their risks by the extreme usage of the leverage contained in derivatives for trading purposes, not for investment purposes - and then got the markets wrong - does not mean that the instruments themselves are evil.

What readers may consider to be evil is the lack of understanding by senior management of the risks involved in aggressive trading by their junior staff; or the desire for respect from their peers by such junior staff; or the desire for large bonuses by all levels of staff; or the general macho culture of the trading environment, encouraging risk-taking that subsequently appears unconscionable. But surely, not the instruments themselves.

We do not ban cars because car crashes occur, we ban the driver.