Facebook Linked In Twitter
Invest Cyprus 30/04-30/03/2019

Prodromou: We Expect the UN to Include Guterres Framework, as Clarified by the UNSG

Wicker: The US has Strong Interest in Cyprus' Reunification



brought to you by CIPA

Gordon Brown Warns About the Next Financial Crisis

Gordon Brown Warns About the Next Financial Crisis

The world is not ready to deal with another financial crisis, former Prime Minister Gordon Brown has told the BBC.

A breakdown in international co-operation means nations would be unable to act in a concerted way to tackle future threats - which are many.

"I feel we're sleepwalking into the next crisis", said Brown, speaking on the 10th anniversary of the start of the previous crisis.

He added that some of the bankers involved should have gone to jail.

Brown, speaking from his living room, said: "This is a leaderless world and I think when the next crisis comes, and there will be a future crisis, we'll find that we neither have the fiscal or monetary room for manoeuvre or the willingness to take that action.

"But perhaps most worrying of all, we will not have the international co-operation necessary to get us out of a worldwide crisis."

In the immediate aftermath of the collapse of Wall Street banking giant Lehman Brothers, the UK government was one of the first to press the case for using public money to recapitalise failing banks and did exactly that - pumping taxpayer funds into Lloyds, HBOS and RBS.

Brown, UK prime minister as the crisis unfolded, said that it was possible to counteract the evaporation of trust in the markets by co-ordinated action between governments and regulators that trusted each other.

"But now with the trade wars, the disagreements over climate change, the nuclear deals that have fallen apart there is no spirit of co-operation - there is division and protectionism and I fear a new crisis would see nations trying to shift the blame to each other."

He acknowledged that the use of public money to bail out high earning bankers was a difficult pill for the public to swallow and although he insists it was necessary, he says that he is frustrated that harsher penalties weren't dished out to some of the bankers involved.

"I'll be honest with you. Some of these bankers should have gone to jail and until we have proper laws that can find the guilty and show there are clear penalties, then people will think the bankers have got away with it and will go back to doing the same thing again."

What blame does he bear himself? Former governor of the Bank of England, Mervyn (Lord) King has been critical of the way his government designed the regulatory regime - moving bank supervision away from the central bank to the Financial Services Authority.

Brown acknowledges that it didn't work perfectly, but argues that the system was designed to look at isolated outbreaks of bank distress - not a contagion which consumed the entire global financial system.

No national warning system, he says, was equipped to see the full picture and no individual country could have tackled the meltdown.

A global problem needs global co-operation. Without that - and with most of the tools available already used (rock bottom interest rates, trillions pumped into the system through quantitative easing) - Brown paints a grim picture of our ability to face the next crisis.




Trump: US Shouldn’t Block Technology

US President Donald Trump has said he wants the US to become a technology leader through ...

Production in Construction Down by 0.4% in Euro Area

In December 2018 compared with November 2018, seasonally adjusted production in the ...

Ford Scales Back in South America

Ford has said it will close a factory in Brazil after more than 50 years as it stops ...



Share of Energy from Renewable Sources in Transport at 2.6% in 2017

The share of energy from renewable sources used for transport in the European Union (EU) stood at 7.6% in 2017, compared with 3.1 % in 2007. Although the ...

Unemployment Falls to 7.6%

Unemployment in Cyprus fell to 7.6% of the labour force in the 4th quarter of 2018, from 7.8% in the 3rd quarter, according to the Labour Force ...

Confusion Among Businesses about Benefits in Kind

The provision of Benefits in Kind is a practice currently followed by a significant number of businesses across Cyprus, with the aim of both creating an ...

Celestyal Cruises: New Goals and New Itineraries for the Year Ahead

Enjoying a dynamic presence in Greece and Cyprus, Celestyal Cruises, a member of the Louis Group, recently published official results for 2018, highlighting ...

Government Spokesman: No Predetermined Date for ExxonMobil’s Drilling Results

Government Spokesman Prodromos Prodromou has said that the government did not have a predetermined date for the announcement of ExxonMobil’s drilling ...

Trump: US Shouldn’t Block Technology

US President Donald Trump has said he wants the US to become a technology leader through competition rather than by blocking others, the BBC reports. Trump ...

Wicker: The US has Strong Interest in Cyprus' Reunification

Vice President of the Parliamentary Assembly of the Organization for Security and Co-operation in Europe, US Senator Roger Wicker has said that the US has a ...

Cathedral City Firm to be Bought for £975M

Dairy Crest, whose brands include Cathedral City cheddar and Country Life butter, has agreed to be bought by a Canadian company in a near-£1bn deal, the ...