In Regulatory issues arising from the financial crisis for ASIC and for market participants, ASIC Chair Tony D’Aloisio argues that ” a significant feature of the collapses which have been part of this wealth destruction, has been flawed business models. Flawed in the sense that they could not withstand the downturn. Too many businesses, and a very large proportion of the failures to date, were built on business models that could only prosper if asset prices continually rose and debt markets remained open and liquid.”…

“should ASIC have prevented these business models or put an end to them earlier?
Now, the answer to this specific question, in the context of the Corporations Act and ASIC’s powers, is clearly ‘no’…responsibility for flawed business models lies with management and with their Boards. It’s part of the ‘free enterprise’ system.”