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GFC 10 years on - More debt money printing has covered up a debt crisis

September 13, 2018
The 15th September will mark ten years since Lehman Brothers filed for Chapter 11 bankruptcy protection, a cataclysmic event which reverberated throughout financial markets and led to the “Global Financial Crisis“. This laid the foundations for an extraordinary period for central bank activity and therefore financial markets. It’s still not clear if lessons from the GFC have been learned. In our 2017 Long Term Study “The Next Financial Crisis” we argued that the global financial system post Bretton Woods remains vulnerable to financial crises, and their frequency has been higher in this period than across all prior financial history. The GFC was clearly an extreme case and likely a once-in-a-lifetime event. However, in solving this crisis we have added more debt to an already heavily indebted system and our central banks have imposed a decade of extraordinary measures, from which most still struggle to withdraw. [more]

More documents about "International"

197 (25-36)
April 22, 2020
29
The economic slump is taking its toll on the banking industry. For the major US banks, profits in Q1 more than halved compared to the prior year, as loan loss reserves jumped. Revenues declined moderately with weakness in interest income and fees and commissions partly compensated for by a jump in trading income. Deposits, loans and other assets surged because clients hoarded liquidity. Banks’ capital ratios fell only somewhat and they remain well capitalised. Banks in Europe may have faced similar trends overall but will probably have benefited less from the supportive trading environment and suffered more from declining capital ratios. They are also handicapped by their much lower starting level in terms of profitability. [more]
March 24, 2020
33
The world economy has, to all intents and purposes, ground to a halt with widespread social distancing and lock-down measures resulting in the closure of restaurants, retail, travel, sporting events and many other business. The impact on local and global growth is unlike any other period in the past as governments come up with economic rescue packages underwritten by central bank easing. [more]
March 3, 2020
34
Growth in luxury has been primarily driven by brand heat and newness, however millennials and Gen Z are increasingly demanding more quality and sustainability. In a recent Deutsche Bank Research consumer survey on what criteria are important for luxury spending and how they have changed over time: sustainability saw the third largest increase to importance when purchasing luxury. [more]
February 27, 2020
36
We revisit the debt situation in Argentina and update our assessment on debt sustainability by projecting both debt stocks and FX debt repayment capacity. Argentina’s debt problem originates from fiscal dominance and lack of nominal anchor. The problem will likely persist in the future unless Argentina implements structural reforms. Current macroeconomic conditions are significantly more challenging than in the early 2000s in terms of potential growth, inflation, and external conditions. [more]
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