The global financial crisis 10 years after : using and forgetting the past?

Abstract

The Global Financial Crisis (or North Atlantic Financial Crisis) appeared to catch most international institutions by surprise. A decade of monetary policy orthodoxy focused on inflation had lulled regulators and central banks into confidence in the resilience of global financial markets. The initial reaction to the crisis by major advanced economies was swift and effective, prompting a coordinated fiscal and monetary response. This reaction drew on the understanding of the causes and consequences of the depression of the 1930s, as Eichengreen and others have noted. But after 10 years, the system has yet to return to 'normal' and there are fears that the prolonged low interest rate environment is creating new financial risks. As we enter the next phase of reversing unconventional monetary policy, it is time to reflect on what we learned from previous crises and what historical lessons we failed to understand that might be useful for future policy-making. To explore these themes, there will be a particular focus on the governance and structure of the international monetary system and the development of the global financial safety net in historical perspective.