Thursday 13 September 2018 7:51 am

Gordon Brown: World ‘sleepwalking’ to another financial crisis

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The world is “sleepwalking” into another financial crisis, former Prime Minister Gordon Brown said today, but said it lacks the international will to quickly recover.

Read more: A decade on, hubris is the lesson to learn from the Lehman tragedy


Brown issued the warning in the week marking the 10th anniversary of the collapse of investment bank Lehman Brothers, which signalled the start of the credit crunch in 2008.

But Britain’s former leader told the BBC that the UK doesn’t have the same financial wriggle room and international allies to help get back on its feet.

“We’re sleepwalking into the next crisis,” he said. “This is a leaderless world and I think when the next crisis comes – and there will be a future crisis – we’ll find that we neither have the fiscal and monetary room for manoeuvre that we had in 2008, 2009, or the willingness to take that action.

“Perhaps most worrying of all we will not have the international cooperation that was necessary to get us out of this worldwide crisis.”

Brown decided to invest public money into saving Lloyds, Royal Bank of Scotland and HBOS, and believes Europe and the US shares a “common cause” to recover from the financial crash through the G20.

Read more: Lehman Brothers 10 years on

But he pointed to trade wars started by the US with China and other regions like the EU, as well as President Donald Trump pulling the US out of the Paris agreement on climate change, and the Iran nuclear deal, as evidence of waning relations on an international level.


“There’s no spirit of cooperation, there’s division and there is protectionism and I fear that if a new crisis came it would be an exercise for countries in shifting the blame to each other rather than acting together to solve the crisis,” he said.

 

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