Greed, reckless behaviour and the financial crisis: a timeline
Four years on from the collapse of Lehman Brothers and its devastating fall-out, we look at how weak oversight and a lack of transparency contributed to the financial crisis. This crisis was not just the result of a few rogue traders placing reckless bets. Corruption, in the form of fraud and a ‘no holds barred’ pursuit of profits, bonuses and growth, infected the whole financial system.
Transparency International believes that not enough has been done to change the culture of greed and reckless risk-taking. The collapse of MF Global, the huge trading losses suffered by JPMorgan Chase and the ever-expanding LIBOR scandal are witness to that. The financial system is still highly opaque, riddled with skewed incentives and dominated by “too-big-to-fail” institutions.
These are precisely the conditions that allow corruption to flourish. To counter this, we need more transparent and accountable financial institutions that are responsive to the needs of consumers, investors and the wider economy. The freedoms that the financial sector has enjoyed under the banner of deregulation have too often served the financial elite.
The challenge to policy-makers and civil society is to ensure that the current wave of “re-regulation” serves the greater public interest – otherwise the privatisation of gains and socialisation of losses that were the hallmark of the financial crisis could occur again and again. We are not there yet.
The following selective timeline highlights key moments in the past two decades when lapses in accountability caused financial havoc. Could this happen again? You judge.
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