Final answer:
Executives of banks might not have been fully cognizant of the impending financial crisis before 2008-2009, despite regulations. Critics highlighted a lack of action from bank regulators and a global pattern of ignoring banking system difficulties until too late, as seen in previous financial crises.
Step-by-step explanation:
The question asks whether the executives of the banks were aware of the precarious financial situation prior to the 2008-2009 recession, despite laws from the 1990s that mandated bank supervisors to disclose their findings and act promptly on identified issues. During the lead-up to the recession, there were critics of the bank regulators who were concerned about the lack of foresight regarding the financial shakiness of the banks. This was compounded by the record profits made by financial firms, which obscured potential signs of disaster. The crisis became apparent when investment bank Bear Stearns faced bankruptcy, causing panic in the system.
However, this was not a unique situation as similar patterns of problems in banking systems were noted in Japan during the 1990s and other parts of the world. This indicates a broader issue of global reluctance to address the struggles of financial institutions in a timely manner, often leading to severe consequences when the underlying problems finally surface, as witnessed during significant financial downturns in history.