A cheery message for Christmas
“Already, we have forgotten the basic lesson of the [financial] crash [of 2008] : Global problems need global solutions. And because we failed to learn from the last crisis, the world’s bankers are carrying us toward the next one.
The economist David Miles, who sits on the monetary policy committee of the Bank of England, may exaggerate when he forecasts financial crises every seven years, but most of the problems that caused the 2008 crisis — excessive borrowing, shadow banking and reckless lending — have not gone away.
Too-big-to-fail banks have not shrunk; they’ve grown bigger. Huge bonuses that encourage reckless risk-taking by bankers remain the norm. Meanwhile, shadow banking — investment and lending services by financial institutions that act like banks, but with less supervision — has expanded in value to $71 trillion, from $59 trillion in 2008.”
So writes former British Prime Minister Gordon Brown in an opinion piece in today’s “New York Times”. He concludes his review of actions since 2008 as follows:
“…precisely what world leaders sought to avoid — a global financial free-for-all, enabled by ad hoc, unilateral actions — is what has happened. Political expediency, a failure to think and act globally, and a lack of courage to take on vested interests are pushing us inexorably toward the next crash.”
Enjoy Christmas ..