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The 2008 Financial Crisis: Not So Global Afterall?

Open Panel Discussion 29 June 2011

The OECD’s conclusion that the 2008 financial crisis was the result of a failure of corporate governance in the individual firms involved does not account for the ‘national blocs’ of banks appearing in the Financial Times’s comparison of the 50 largest banks globally in 2009. Compared with 1999, American and British banks as a whole had lost significant ground whilst those of other countries, notably Canada and Australia, actually gained. This strongly suggests that national factors played an important role – even in such apparently similar ‘liberal market’ economies.

For the past two years, the London Centre for Corporate Governance & Ethics (LCCGE) at Birkbeck has been conducting multidisciplinary research to identify the factors that created this sharp divergence in the relative resilience of the Anglo-Saxon financial systems during the crisis; and we are coordinating an international team of researchers, with partners in each of the six liberal market economies – the US, UK, Ireland, Canada, Australia and New Zealand.

Our findings suggest that there is ‘variety’ in economic liberalism and a clear division in the interpretation of liberal economic theory and the way it was translated into policy in the Anglo-Saxon world. We identify a sharp divide in the way that the six economies were liberalised, the subsequent effect on their systems of corporate governance and ultimately financial regulation. From this, it is hard to escape the conclusion that there is in fact no such thing as ‘Anglo-Saxon Capitalism,’ and consequently, no general failure of liberal capitalism per se. Instead, the experience of the six Anglo-Saxon countries in the 2008 crisis suggests the failing of a particular variety of economic liberalism, where the balance between the state and the private sector had become unsustainable.

The LCCGE will host a conference at Birkbeck College on June 29th 2011, where representatives from the six country teams will together evolve the design of the next stage of our research. We will present our research at an Open Panel Discussion during the Wednesday evening event of Birkbeck’s Annual Business Week Programme.

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