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How to Avoid Another Giant Financial Crisis

Finance By
(Creative RF/Getty Images)
(Creative RF/Getty Images)

 

Following the United Kingdom’s recent exit from the eurozone, it’s a better time than any to revisit the lessons learned after the 2008 financial crisis. While the so-called “Brexit” is nowhere near as serious an event as the 2008 crisis, it might still be enough to spread volatility and speculation throughout the global markets.

Focusing on 2008, Harvard Law professor Hal Scott argues that we didn’t learn our lesson and risk is even higher now of a follow-up crisis. He believes that the financial meltdown was not about “connectedness” (i.e. large financial institutions being exposed to one another’s insolvency), but “contagion.” What does he mean, and how can this help us avoid another crisis? Read ‘ piece in Harvard Law Today here.