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Thursday, 10 September 2009

lessons learnt?

It does seem to me that the fundamental lessons that need to be learnt from the financial crisis haven't been.
To paraphrase, Ashley Seager says:
"And the investment bankers are out there making money again, popping the champagne corks and telling themselves how clever they are – after all, they have managed to pass a good proportion of their huge losses on to us, the taxpayers, and are sitting at the roulette table again."

"In spite of Merkel and Sarkozy's admirable desire to do something about all of this, Tim Geithner, the US treasury secretary, made it clear that the US thinks that forcing banks to hold more capital is a far better way to prevent future crises."

i'd certainly agree that having more capital as a ratio is a very important step, more so than arbitrarily capping bonuses.

but all that does not properly address the issues that caused the collapse. I'd say they were excess reliance on debt, in addition to the lack of actual capital in the banks
too free markets
politicians scared of financiers
concentration of power in banks too important to fail
lack of interest by the general public

maybe others too

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