Looking back at this financial crises the IMF form the view that although the reaction's of governments was swift, it was rather superficial and left us with less options when the crises happens again.
...compared with earlier episodes, the response featured less attention to indepth diagnosis of financial institutions and fewer incentives for an early restructuring of assets.
This more than validates the arguments by campaigners that financial reform is needed. What the present government has done has been superficial and just a transfer of debt to the public purse.
The policy mix applied in the recent crisis has come at a high overall cost and has intensified moral hazard. The mix is unlikely to be repeated in response to a future crisis because it would be too costly economically and too controversial politically. In preparing for a future crisis, therefore, we must consider how to apply the constructive aspects of the recent response—early stabilization through accommodative policies—and improve the areas in which it was weakest—the limited conditionality of public support and the gradual restructuring of assets.
We haven't gone far enough to reform our banks. Basel III requirement's are viewed as lax, at best, by most financial commentators.
We are slowly loosing the opportunity to prevent the next financial crises. It will be more painful and more costly when it happens next as pointed out above.
The trigger of this financial crises was the incorrect values of assets priced by banks and financial institutions. One would have hoped that after the crises we would have taken a better look at what these assets are truly worth ? Instead we decided to give most, if not all, Bank Assets a haircut. We gave them an arbitrary number to aim for, hmmm let see... Seven? A nice number don't you think? In this short-cut world of today instead of valuing the assets properly we just guaranteed them to calm the masses, as sated in this IMF document.
Asset guarantees have been provided on both ‘good’ and ‘bad’ assets and were seemingly deployed primarily as a crisis containment tools to reassure creditors that banks were sufficiently capitalized rather than to restructure banks balance sheets.
It is in the interest of the politicians and government's to resolve this crisis fore the sake of the industry.
http://www.imf.org/external/pubs/ft/sdn/2011/sdn1105.pdf
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