David McWilliams: Seven rules of life to avoid a financial crisis

Ten years on from the global banking crisis, have we learned anything?

“To misquote Oscar Wilde, to lose money once in a crisis can be viewed as a misfortune, to do so twice is careless.” Photograph: istock

“To misquote Oscar Wilde, to lose money once in a crisis can be viewed as a misfortune, to do so twice is careless.” Photograph: istock

On this day 10 years ago, Katy Perry’s I Kissed a Girl was hurtling up the charts almost as quickly as deposits were hurtling out of the Irish banks. Within a few weeks, Ms Perry would go on to sell millions, and the Irish banks go on to lose billions. Yet, even in late July, when they could see what was happening, those in the regulator’s office were still bleating that the fundamentals were sound and the banks were well-financed. That they believed it is one of the most difficult aspects of the sorry saga to digest. 

But they weren’t alone. From New York to Frankfurt, from Dublin to Dubai, banks went to the wall in the biggest boom/bust credit cycle the world has yet experienced. It was on the same scale as the 1929 crash, with the added complication of enormous inter-country leverage, implying that the crash was viciously contagious, jumping not just from bank to bank but from country to country.

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