Did the financial crisis change very much? That was my question as I went to the annual meeting of the World Economic Forum in Davos last week. The answer is: yes. Above all, it has accelerated the arrival of our future. Even for the winners, this is quite a shock.Posted by jez at February 10, 2011 9:23 PM | Subscribe to this site via RSS:
It is three and a half years since the financial crisis began and a little more than two years since it reached its worst. Bob Diamond, chief executive of Barclays, gave the financial sector's thanks to governments for the rescue. Now the mood is one of wary optimism. According to the International Monetary Fund's World Economic Outlook update, global output grew in 2010 by 5 per cent, at purchasing power parity, and 3.9 per cent, at market exchange rates. This contrasts with declines of 0.6 per cent and 2.1 per cent, respectively, in 2009. The IMF expects growth to slow only slightly to 4.4 per cent at PPP and 3.5 per cent at market exchange rates, in 2011. Optimism continues to reign.
With the crisis fading into memory, how will historians assess its legacy? Journalists do not have the luxury of distance. So here are my guesses. I will start with possible turnrounds.
The crisis was neither the beginning of a depression nor the end of capitalism. But it has caused a tightening of financial regulation, particularly of banks, though this has occurred within the pre-existing intellectual and institutional framework. After three decades of deregulation, movement is in the opposite direction, though not without resistance.