The Global Financial Crisis Ten Year On

The historical perspective of modern bankers is notoriously short. In the financial services sector, compensation schemes based on share-price movements or profits from annual deal-making reinforce this short-termism. It is salutary, however, that the trader Greg Lippman, famous for predicting the end of the securitized mortgage debt boom (and making billions for Deutsche Bank when the system collapsed) based his Big Short on a longer-term data set than his competitors. The past is not always prologue, but it should clearly not be ignored. Policy-makers, on the other hand, are more open to reflection, even if only to decide that ‘this time is different’. Understanding what is different is as important as understanding what might be the same as past episodes. However, just at the time of the Global Financial Crisis, Macmillan (2008) reminded us that ‘the past can be used for almost anything you want to do in the present’. Historians may rail against their own irrelevance most of the time, but the past is often a recourse in times of crisis for policy-makers, although their use of the past may be selective. This chapter addresses how the past has been used and how it can be used in the context of crisis.