Did the World change on 9 August 2007?
9 August 2017 marks the 10th Anniversary of the day the financial world started to go into freefall ultimately leading to the collapse and bailout of banks in Autumn 2008. A new pressure group Promoting Economic Pluralism is working with a network of organisations to ensure that the lessons of that period have been learnt starting with a series of events in September.
London: 9 August 2017: “The day the world changed”, was how Adam Applegarth, Northern Rock’s chief executive described the beginning of the Financial Crash, on August 9, 2007. This was the day that the bank BNP-Paribas refused to allow withdrawals from its hedge funds, citing a “complete evaporation of liquidity”.
This signalled the beginning of the global financial crash which threatened to destroy the current Western economic system, as bank-after-bank: Lehman Brothers, Bear Sterns, Royal Bank of Scotland, and HBOS, and building society-after-building society: Northern Rock, Bradley and Bingley filed for bankruptcy, was taken over or went to the wall.
This chain of events took everyone by surprise, so even the Queen asked economists at the LSE in November 2008, ‘Why did no-one see it coming?
While the financial institutions have mainly recovered, repercussions of the Crash are still being felt: this week the Financial Times reported that in the US, financial institutions have paid more than $150bn in fines relating to the credit crisis.
According to Financial Times analysis the Bank of America has paid $56bn to US authorities, while JPMorgan Chase, which acquired Bear Stearns and Washington Mutual, has paid $27bn in fines and relief.
Many also see the Crash and Governments’ reaction to it in terms of both bailing out the banks and initiating austerity as creating the conditions for the social and political upheaval we have seen more recently.
Marking ‘10 Years after the Crash’
Promoting Economic Pluralism (PEP), a pressure group working to promote innovation in economic thinking to help tackle the social, environmental and economic challenges we face, has joined with the Royal Society of Arts, and a network of other organisations to develop a process to look for new answers seeming to involve people ultimately as widely as possible.
To start this process they will jointly be hosting a series of events marking 10 years after the first run on a British Bank, Northern Rock, for almost 150 years. These begin on 11 September. Former Chancellor of the Exchequer, Alistair Darling, who was at the middle of the storm, will give the opening lecture, as he reflects on what we have and haven’t learned from the crisis, and what needs to be done next to shape a fairer future prosperity.
Other speakers include: Ann Pettifor, Director of Policy Research in Macroeconomics (PRIME), Broadcaster Robert Peston, who broke the Northern Rock story; Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20, and Eric Beinhocker, Executive Director of the Institute for New Economic Thinking at the Oxford Martin School, Oxford University.
10 Years after the Crash will address three key questions over the coming 18 months:
- What lessons have we learned from the crash;
- Have we taken the necessary steps to reform our economic systems in response;
- How can we develop a wider understanding of what is needed to deliver a fairer, more resilient and sustainable economy?
We will look to involve people from all walks of like in this dialogue over the coming months to build a shared direction for economic reform.
For more details of Promoting Economic Pluralism’s ’10 Years after the Crash, please go to: https://10yearsafterthecrash.com/
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