There could be another financial crisis in 5 years Op-ed: Five years after Lehman Brothers, big pillars of reform are still not in place and five years from now, we could find ourselves in another financial crisis. The "Lehman weekend" five years ago has taken on symbolic importance as the fulcrum of the financial crisis, but the roots of the crisis were broad and deep-planted in years of unconstrained excess on Wall Street and prolonged complacency in Washington and financial capitals worldwide. "Shadow banking" permitted the financial sector to engage in highly leveraged, short-funded maturity transformation with too little transparency, not enough capital and little restraint. Large firms became more interconnected and became increasingly reliant on short-term funding from repo transactions, derivatives, money market funds, securities lenders and prime brokerage business. Huge amounts of risk moved outside the more regulated parts of the banking system to where it was easier to increase leverage.... Full Story : hereisthecity/2013/09/15/there-could-be-another-financial-crisis-in-5-years/
Posted on: Mon, 16 Sep 2013 09:00:00 +0000
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