mr. sirrithe inspector general has reported that the sec was aware of some sufficiency some risk-management practices of bear stearns concentration of mortgage things like that. do you think the sec could have prevented the failure at bear stearns? >> i think the distinction to be made here is the distinction between understanding concentration and understanding what that means for the rest of the firm. we certainly were aware of concentrations of mortgage securities. bear stearns, the securities firm within that is substantial fixed-income business and nested within the fixed-income business that substantial mortgage business. so in that sense it was a business decision by the firm to be concentrated mortgage entity. the thing that we missed and i think most of the industry's best and most regulators missed is that the question of how volatile or what kind of prices are undermining the value changes you could see in the mortgage instruments. we didn't miss the concentration. the mistake was we

sirrah mr. sirri. -- mr. sirri. >> it had nothing to do with the cse program, in my view. >> ok. >> i think the observation you make is a good one, which is it is hard to prescribe the causality to the form and implementation of the regulatory oversight. i just make a comment that it is hard to prescribe the problem to institutional form. he sought investment banks, commercial banks, insurance companies, all sorts of entities failed. it seems what was common in these cases were the instruments. there were tied tightly to mortgages and, in some places, to commercial real estate. that seems to be what was common. in the regulated entities, the commercial banks, and the cse banks, and in a couple of other places, people understood the exposures. what was hard to appreciate was just a fine, reconciling the -- was reconciling what the market was telling you with something that happened that was outside of the can of what people expected. there were a number of things like that that happened. we spent a lot of time