Ten years ago last week, on Aug. 9. 2007, the world began its slide into the worst financial crisis since the Great Depression. In fact, the events of that day marked the acceleration of a process that had begun months earlier, but the decision by the French bank BNP Paribas to block withdrawals from hedge funds that specialized in U.S. mortgage debt launched a credit crisis that resulted in the loss of trillions of dollars of net worth around the world, crushed Japan’s nascent recovery and ushered in an era of once-unthinkable economic policies. The losses incurred in the chaotic days after that fateful decision have been recouped — statistically the global economy is larger than it was then — but the damage lingers in the lives of individuals who paid a price for financial malfeasance, regulatory complacence and sheer incompetence. Worse, there are fears that new bubbles are emerging and yet another “correction” is possible.

Hundreds of books explain what caused the crash of 2007: Many of them are more interested in advancing ideological and political agendas than providing an unvarnished assessment of what transpired. The simplest explanation is the most accurate, however: Credit was extended to unqualified homeowners in the United States. When a housing bubble burst in 2006, the default rate of those loans skyrocketed, destroying the value of securities that were based on those mortgages. Banks invested heavily in those securities because they were inaccurately rated — assessed as low risk — or bamboozled by smooth-talking salesmen, and they encountered liquidity crises as the value of those securities plummeted.

While nearly all the mortgages were in the U.S., financial institutions around the world had purchased the securities based upon them. Catastrophic losses ensued, resulting in the closure of several venerable financial institutions, such as Lehman Brothers. Ironically, Japan, which had little exposure to mortgage debt, was one of the economies hardest hit by the crash: GDP fell 12 percent in the quarter immediately after the collapse of Lehman Brothers as a result of shrinking demand throughout the world. Only unprecedented government intervention saved the global financial system from collapse. Acting in concert, central banks took coordinated action to recapitalize lenders, buy up toxic assets, injected liquidity into shrinking economies and lowered interest rates to unprecedented levels, including zero in some cases.

These drastic steps kept the Great Recession from becoming a second Great Depression. But politicians were slow to do their part. They failed to provide the stimulus that every economics textbook explains is required when private demand evaporates. A misguided vogue for austerity has slowed the recovery that began when banking authorities recognized the error of their laissez-faire ways. In many countries, this inexplicable mentality continues to be held by politicians.

Bank regulators, once asleep at the switch, instituted new rules, the most significant of which force their charges to hold more capital to cover potential losses and that separate investment and consumer banking to keep those institutions from using clients’ money to cover their own losses. It is a troubling sign that some of the most important steps to prevent a recurrence of the crisis are now in danger of being rolled back or eliminated.

The world economy has recouped many of those losses, but extraordinary damage has been done. Economic growth remains tentative and large numbers of ordinary citizens have been scarred — financially and psychologically — by their experience. Wages remain stagnant and the demand side of the economy lags.

More significant are distortions that have been introduced into many economies. For example, the Bank of Japan commenced a historic purchase of assets, ostensibly to boost demand and end deflationary pressures, but the long-sought goal of 2 percent inflation remains beyond reach. The result is a swelling inventory of holdings that will, at some point, have to be sold. How that will unfold is anyone’s guess. Japan has also experimented with zero and negative interest rates, but it is not the only country to have done so.

The losses triggered by the crisis and the failure of politicians to see ordinary citizens made whole in its aftermath are also responsible for a loss of faith in globalization and the populist backlash that has seized many countries in the West. Disgruntled voters see those most responsible for the situation walking away without a loss — many even received bonuses. Faith in government has plunged, and voters are looking for alternatives as the social contract is strained and the social safety net torn.

More alarming still are warning signs of another bubble. Analysts point to stock market valuations that defy reason, to swelling student debt in the U.S., and to mountains of hidden debt in China. A crisis now, when interest rates remain low, means that central bankers will not have one of their most vital tools to create demand if consumers are again brought to their knees. There is little to celebrate a decade after the global financial crisis.

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