Gordon Brown, former PM said in a press conference that the world is sleepwalking into a massive financial crisis, part of his analysis of unresolved 2009 problems. Brown, the former Labour Party leader, took over in 2007 from Tony Blair, said the leaderless world closes their eyes as the neared the 2008 – early 2009 meltdown and since then everyone has completely failed to remedy the cause of the crash that took place a decade ago.
It is a warning from Brown as he referred to the period when the US investment bank put all major banks at risk, he also shared that the decade of stagnation that took place over the past decade causes concern due to the vulnerability of the global economy.
Scathing Analysis by Gordon Brown
Brown spoke to the Guardian at his residence in Scotland and at the time delivered a scathing analysis of several huge problems, still the remaining unsolved after 2009, he feels much tougher action is now required to prevent bankers guilty of wrongdoing.
Brown played an active role in the creation of the G20, an organisation consisting of world leading developing nations, although he feels that the teamwork that assisted in avoiding the next great depression was replaced by countries who retreated into separatists’ silos.
His fear is that everyone is in danger of sleepwalking into the next crisis and when he was asked in 2008 to access the risk of a repeat, he made it clear that the only way to prevent it is a severe awakening of a world that is leaderless.
Breakdown of Trust by the Financial Sector Mirrored by Governments is Next Crisis
Brown has his doubts that China will be as cooperative as the first time when he was asked to comment on the trade war launched by the US against Beijing. He feels the major barrier to building international cooperation is Trump’s protectionism. Brown had a very short honeymoon after taking over in June 2007 from Tony Blair, before the first signs emerged in the summer of trouble, he strongly feels that the global economy completely lacks a system for financial flow as well as an early warning system. No real system is in place for monitoring who lent from who and while some of the small things had been dealt with, the big things have been left to escalate.
Penalties not Sufficiently Increased
Wrong-doing penalties have not sufficiently been increased, Brown feels that the fear that bankers could be imprisoned for their behaviour is lacking. The message is not near strong enough that is sent out by the governments and therefore it needs to be made completely clear that government will no longer rescue any institution that has not put their houses in order. The 2008 crises had its roots in the housing market in the US, with the subprime mortgage sustained losses cascading through the financial system globally, all part of the events leading up to the Lehmans collapse and the next time it would just be a different cause, Brown feels.