Will any government be brave enough to let a big bank fail? (Credit: Ian Kennedy, Flickr Creative Commons)
Five frightening years after the meltdown of the global financial system – with the world’s advanced economies stuck in a painful slump – policymakers are still struggling to reinvigorate job growth. If the unemployed were awaiting some tangible initiative from this summer’s G8 summit, they were surely disappointed: Last week’s G8 summit communiqué offered only boilerplate assertions that “decisive action is needed to nurture a sustainable recovery and restore the resilience of the global economy.”
The financial fiasco of 2008 left human wreckage in its wake. An additional 120 million people worldwide were plunged into poverty at the nadir of the crisis, wiping out years of development progress. According to the World Bank's most recent World Development Report, there are now about 200 million unemployed worldwide; 1.5 billion only marginally employed in tenuous jobs; and 2 billion dropouts from the workforce.
The global community faces an epic governance and accountability challenge: the big banks that we all use either directly or indirectly are out of control and nobody seems to know what to do about them. As we mark the fifth anniversary of the global financial crisis this month, it appears as if every new week brings news of a fresh banking scandal. The recent list: