Happy birthday?

Ten years ago last week things started happening that would bring the world economic order to the edge of collapse.  In many countries banks stopped lending to each other. Liquidity and, with it, new investment all but evaporated. In the UK we had the first run on a financial institution since the middle of the 19th century.

It turned out that for all their self-advertised cleverness the uber rich demi gods of the then finance industry could not undo what they had done. Governments and various international institutions had to step in to prevent the complete breakdown that was otherwise inevitable.   A great many lives were ruined. A worldwide recession began, the effects of which are still with us.  Unsurprisingly there were political consequences. The rise of the populist right and their mirror image on the far left, Brexit and Trump can be traced back to those times and what followed. The promise that was globalisation was turning into something completely different and unwelcome. The elites implicated in the project were severely undermined. At dinner parties bankers would pretend they were in the used car business rather than admit the truth.

How did this happen? There were several reasons but by common consent two were key :

  1. The interdependencies of different sorts of financial instrument had become so complex probably nobody in the world fully understood them and even if they had
  2. The finance industry was a powerful lobby which had convinced politicians to stay off their turf.

Is this ringing any bells?


About John Carr

John Carr is a member of the Executive Board of the UK Council on Child Internet Safety, the British Government's principal advisory body for online safety and security for children and young people. In the summer of 2013 he was appointed as an adviser to Bangkok-based ECPAT International. Amongst other things John is or has been a Senior Expert Adviser to the United Nations, ITU, the European Union, a member of the Executive Board of the European NGO Alliance for Child Safety Online, Secretary of the UK's Children's Charities' Coalition on Internet Safety. John has advised many of the world's largest internet companies on online child safety. In June, 2012, John was appointed a Visiting Senior Fellow at the London School of Economics and Political Science. More: http://johncarrcv.blogspot.com
This entry was posted in Internet governance, Regulation, Self-regulation. Bookmark the permalink.