What have we learned from the financial crisis 100 years ago?

What have we learned from the financial crisis 100 years ago?

Just days before war broke out in 1914, British banks were paralysed by a global financial crisis in a similar way to the crisis almost 100 years later, in 2008. Edward Bonham Carter, vice chairman of Jupiter Fund Management, looks at the parallels

The Great Financial Crisis of 1914 was, according to Richard Roberts, author of Saving the City, "the most severe systemic crisis London has ever experienced". It was not a typical crisis, in that it was not preceded by enormous over-borrowing, wild speculation, and an asset bubble, nor followed by an economic downturn. Instead, there was a ‘displacement' moment in the form of the Austrian ultimatum (ie, an extraordinary event that overnight drastically altered investors' perception of risk). The collapse of Lehman Brothers in September 2008 was a similar displacement which overturned ...