Tuesday 08, January 2013 by Matein Khalid

Storm clouds over the global banking village

The trauma of the 2008-9 financial crisis culminated in the failure of Lehman Brothers, global recession, currency wars, Occupy Wall Street, the European sovereign debt crisis and unorthodox central bank policies that have led, as Keynes once predicted, to the euthanasia of creditors. In retrospect, it is not difficult to pinpoint the myriad forces that led global finance to the brink of systemic failure in 2008. These ranged from post Glass Steagall’s excessive deregulation, the Greenspan Fed’s recurrent tolerance of asset bubbles, the malign ostensibly innovative, Frankensteins in the credit markets (CDO squared, shadow banking SPV’s), the political power of megabank CEO’s in Capitol Hill, Westminster (as well as Reich Chancellery, the Elysee Palace and the Kremlin!), securitization gone berserk in Wall Street and the City of London, the borrowing binges in Club Med and frenzied property speculation.