LET'S face it, while "risk taking" is fundamental to the functioning of economic systems, and in particular to economic growth, few really understand it, or actually manage it well.

They generally know "risk" when they see it, or experience it, but they mostly don't see it coming, and they consistently tend to underestimate it, and/or under-price it.

This applies to most economic players, not just entrepreneurs, property developers, innovators, miners and other "risky" businesses, but also governments, policy bureaucrats, and even our most conservative economic participants, central banks.

The recent global financial crisis had its origins in a globally significant under-pricing of risk - US sub-prime housing loans, which were little more than a national punt on house prices continuing to rise, formed the basis of a mountain of global "securitised" debt, and other financial instruments and transactions - when house prices faltered, the mountain collapsed.

Just ask our local council, which "risked" the majority of their investment funds on one of those debt instruments, CDOs, for a slightly better return than they would have received from a bank term deposit, in the naive belief that these instruments were actually AAA, and could be safely held to maturity.

They clearly didn't understand the risks they were actually taking. They certainly under-priced it in their calculations, if they did any?

Equally, the key central banks and governments of the world didn't see the "systemic" consequences of this cumulative behaviour, being caught short as the crisis unfolded, as banks and other institutions collapsed, and the world economy slipped rapidly into recession, risking a further slide into depression.

Against the background of all of this, I was fascinated to note the juxtaposition of two statements made this week by two significant global central bankers, Stevens, of our Reserve Bank, and Caruana of the central bankers' bank, the BIS.

Caruana was warning that too many countries (including emerging markets) are again piling up too much debt, and that risk is being increasingly mis-priced, again.

In particular, he noted that 40 per cent of syndicated loans are now being made to sub-investment grade (ie, "junk") borrowers.

It seems that we are already repeating the behaviour that led to the 2007 crisis - if true, almost inconceivable, and unforgiveable.

While conceding some resurgence of excessive financial risk taking, Stevens was calling for "more prepared to take a risk" - for more entrepreneurs - to take a risk "on a new product, a new factory or process, an innovation, a new market, or a new employee.

Stevens obviously can't understand why low interest rates and abundant liquidity have failed to stimulate this entrepreneurial risk taking, that is so fundamental to restoring economic growth.

He even went as far as saying that "risky financial behaviour" is a risk "worth taking" to restore "dynamic growth".

Obviously, Stevens hasn't operated in the current financial world he has contributed to creating - never tried to raise equity, or to get a bank loan, to fund his much desired entrepreneurial revolution.

One response by central bankers to the GFC has been to require banks to hold more capital, and to allocate it against different loans on a "risk weighted basis".

That is, banks are required to discriminate against business loans (relative to say housing loans), thereby denying Stevens' entrepreneurs the funding they desperately require to take the risks he wants them to take. It also risks the "housing bubble" he most fears.

Add to this, the fact that equity investors will often require evidence of bank support for the business as an element of their investment decision, guaranteeing that the entrepreneurs' new product/factory/process/innovation/market/employee, and therefore business, will fail before its begun.

I rest my case. They don't understand "risk".