Warren Buffet famously remarked that it’s only when the tide goes out that we see who’s swimming with no trunks on. What surprises me is just who’s been left exposed by the current financial crisis.

The final few months of 2008 saw some of the most respected institutions in the world hit the rocks. The independent investment banking model has virtually disappeared. Funds that offered solid returns for years have since been exposed as houses built on sand. And the list of high-profile names burned by the Bernie Madoff scandal grows longer by the day.

The net result is an overwhelming lack of confidence in not just the capital markets, but in the very fabric of an economic model that could allow such widespread mismanagement – and in some cases, outright fraud – to flourish unchecked.

Madoff is a case in point. He is fascinating because of what Time magazine calls “the astonishing audacity of his actions”. We want to understand what kind of environment would allow his decades-long financial fraud to thrive, why sophisticated investors could get sucked in by returns that looked (and were) too good to be true.

Can we recover from this crisis in confidence? It’ll certainly take time. No one likes to be caught with their pants down, and in a tight economy potential investors are likely to be more cautious than ever before regarding where they put their money.

So what’s the best way to rekindle trust in our big corporations, the markets, and in the economic model itself?