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One Hundred Years of Ineptitude

The 2008 crisis will most likely be remembered as a watershed moment – and not because it served as an effective wake-up call for policymakers. On the contrary, that crisis – and the failure of leaders to discern, much less act on, its lessons – may well open the way for many more crises in the coming decades.

BERLIN – The global financial and economic crisis that began in 2008 was the greatest economic stress-test since the Great Depression, and the greatest challenge to social and political systems since World War II. It not only put financial markets and currencies at risk; it also exposed serious regulatory and governance shortcomings that have yet to be fully addressed.

In fact, the 2008 crisis will most likely be remembered as a watershed moment, but not because it led to reforms that strengthened economic resilience and removed vulnerabilities. On the contrary, leaders’ failure to discern, much less act on, the lessons of the Great Recession may open the way for a series of fresh crises, economic and otherwise, in the coming decades.

However serious those crises turn out to be, historians a century from now will likely despair at our shortsightedness. They will note that analysts and regulators were narrowly focused on fixing the financial system by strengthening national oversight regimes. While this was a worthy goal, historians will point out, it was far from the only imperative.

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