The financial crisis has shown the lies of transparency, disintermediation and risk management. The former maestro, Alan Greenspan, suggests that the crisis reveals a flaw in his thinking that bankers would act in the interests of their shareholders. At the same time both friends and enemies of the United States say a function of excesses and inadequacies—excess consumption, excess borrowing, excess financial engineering—and insufficient supervision and regulation, created the crisis.
If the US is the epicenter of the crisis, then it is ironic, or “unfair” according to Niall Ferguson, that the situation has manifested more ferociously abroad. The Japanese economy contracted at an annualized pace of almost 13%, while Germany’s diminished at an 8% pace.