Publication

The authors argue that the main problems which led to the 2008-09 financial crisis were deeply rooted. They are to be found in two closely-linked developments that for many years were both left largely uncontrolled: the increase in the intensity of international transfers of savings – the so-called ‘global imbalances’ – and a wave of innovations – globalized finance – that have changed the way savings and the risks related to their investment can be transferred. Unfortunately, no one was in charge of keeping a check on either the quantity of risk being accumulated in this way or the quality of the loans generating those risks.