Our progress since 2008? Ten years older, and deeper in debt

A decade on from the collapse of Lehman Brothers, it doesn’t look like we’ve learnt any of the lessons of the credit crunch. But the next crisis won’t look the same as the last one, says John Stepek.

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This month marks ten years since US investment bank Lehman Brothers collapsed. As our timeline below shows, this was far from the start of the financial crisis. However, it was the critical moment at which it became very clear to even the most disinterested observer that all was not well with the financial world. Banks around the world had enjoyed a tame regulatory framework and a complacent, Wall-Street-friendly central-bank regime under Federal Reserve chief Alan Greenspan. They exploited this overly forgiving backdrop by using financial engineering to create swathes of complex mortgage-backed products that could meet soaring global demand for high-yielding yet apparently "safe" assets. In the pursuit of ever-rising profits and bonus payments, they expanded their balance sheets to breaking point leveraging up (particularly in Europe) to the point where it would only take a very small rise in the number of bad debts on their books to ruin them.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.