It’s almost exactly a year since the ECB was forced to inject €95bn into the eurozone banking system, bringing home what many had suspected – that the fallout from the US subprime mortgage crisis would have serious repercussions in global financial markets. The fallout has, indeed, been dramatic.
In a series of reports thoughout this week, the FT looks at how the world has changed in the past 12 months and the long-term impact on the global financial system and the world economy.
In Part I of the series, today, Gillian Tett, the FT’s capital markets editor, examines the reasons for the credit crisis – which began in the US suburbs and overturned the assumptions of bankers.
She concludes it will take years, not months, to restore that crucial ingredient, trust, in the banking world – particularly given that so many of the assumptions underlying 21st-century finance have turned out to be so dangerously wrong.