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By Benedicte Gravrand, Opalesque London: Dr. Richard Werner is director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton (UK), CEO at Southampton-based Providence Asset Management, and author of ‘New Paradigm in Macro-economics’ (2005, Palgrave MacMillan). He gave his version of the current crisis at the Hedge 2008 conference in London last week.
The current financial crisis is not new
Even though significant breakdowns in inter-bank market are rare and the extent of the problem is great, the fundamental cause and the solutions are not new. It can be traced back 5000 years. However “this crisis is different,” said Dr Werner.
His opinion is mirrored by others:
“There’s never been anything this pervasive, this challenging to the structure,” former Bear Stearns chair Ace Greenberg had told MoneyNews.com. The huge number of securitized mortgages distinguished the current financial crisis from its predecessors. Mortgage-backed securities created a credit problem that spread nationwide before infecting Europe and Asia.
Gerry Kramer wrote in NaplesNews.com that this crisis was different because, first, the last 25 years had been a period of vast financial innovation in world capital markets; second, gross interbank financial transactions and contracts in the US alone had totalled trillions of dollars; third, the fina...................... To view our full article Click here
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