For the team here, this September marks more than ‘back to school': it starts the countdown to 15th September 2018, a decade to the day from the Lehman’s default, the biggest market-shaping events of recent times – and a process that my colleague Christian Lee directly helped manage.
Of course, ‘the crash’ didn’t happen in a day. Cracks had been visible for months, widening into full public display in the UK with coverage of Northern Rock – particularly by then BBC Business Editor Robert Peston: the man who allegedly brought down the undoubtedly already failing bank. Which almost certainly wasn’t true, but made a great story.
But, devastating for individuals and serious shock though it was, the Rock crumbling was just the prelude. The financial earth shook … then settled, not quite masking the rumbling approach of the global earthquake to follow, but with just enough cover to pretend all might yet be well.
And then it came – and its name was Lehman Brothers. In the words of Stephen Loosley – who, like Christian, worked at the heart of the Lehman’s default, “Northern Rock was a tremor – Lehman’s was the earthquake”.
Lehman’s demise on 15th September 2008 was a seismic event. Beyond the initial blast, it rained fire: pain, rocks and rage. The public mood and banking skies darkened and stayed dark, illuminated only by flashes of visceral anger on an epic scale, commanding that ‘something must be done’. And so it came to pass: wave after wave of legal extinguishing foam, flowing out of the G20 as the healing balm of regulation: EMIR, MiFID, BCBS, FRTB – a lullaby of accumulated acronyms, set to the music of central counterparty clearing. Regroup, de-risk and ultimately all shall be well: a refrain that still drives the agenda today.
Good response? Then, perhaps. But now?
Having ‘been there’, we think it’s to get back to the future – quickly. New tremblings are already emerging: did someone say ‘Return of the regulator‘? And where once there was a firestorm, there’s now a potential vacuum around what ‘good’ banking looks like. A vision for the future should be about more than fixing the past – so plug that gap or be pulled into another downward spiral.
Throughout the coming months, we’ll be discussing different aspects of what’s changed over the past decade – and even more importantly, where we go from here.
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