A decade after the financial meltdown, its underlying problems haven’t been fixed

The banks have, to a certain extent, changed their ways: but cheap credit, low interest rates and mountains of debt are still with us

Ten years ago this week, the global financial crisis started with a small rumble in France. Local bank BNP Paribas announced it was freezing the assets of three hedge funds with heavy exposures to the US sub-prime mortgage market. A little more than a year later, after the run on Northern Rock and the bailout of Bear Stearns in the US, the full earthquake arrived in the form of the collapse of Lehman Brothers, one of Wall Street’s biggest banks.

We soon discovered the full horrors within the financial system. Banks had taken on risks they did not understand and called the process “innovation”. Credit rating agencies had fallen asleep. Weak or incompetent regulators, encouraged by politicians, had been idle. In the UK, RBS would be mostly nationalised and the ailing HBOS was shoved into the arms of Lloyds TSB with a state bailout to follow.

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