Monthly Archive for March, 2014

Lessons from the crisis

(Excerpt from a speech at the Hilton Hotel, Budapest – March 28)

What lessons can we learn from the financial crisis of the past 5 years? How can we avoid making the same mistakes in the future? Einstein famously quoted, “we cannot solve problems using the same thinking that originally caused the problems.”  How can we think differently about personal and corporate finance in a vulnerable economy. It is also said that money will not solve financial problems  – only alleviate the symptoms for a short time – and that the financial crisis is, at its core, a problem of the human heart, not a technical problem. We need a new way of thinking, both collectively and individually, which changes our behaviour.

But how can we change in the midst of a crisis?  And I think we are still right in the middle.

Last month in Prague, I spoke to Bruno Roche, chief economist of Mars Inc., one of our speakers, recently and asked him what he thinks of the economic recovery we seem to be in and does he think that it will last? His answer: This recovery cannot last. He, and others who he knows, are expecting another downturn. This will most likely occur in 2015. He then went on to say that this next downturn is going to make what happened in 2008 look like peanuts because the world is much more in  debt now than it was then.”

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