Unheeded Lessons: What Did We Fail to Learn from the Financial Crisis?

Nearly two years after the financial meltdown of September 2008, is the global economy any less risky? Or do the conditions that led to the crisis still persist? These questions and more were at the heart of a conference titled, "Global Risk: New Perspectives and Opportunities," organized at Wharton by Penn Lauder CIBER (Center for International Education and Research) and Santander Universities. The consensus: We managed to respond to the immediate threats, but the longer-term drivers of instability are still active.

According to Nouriel Roubini, an economist at New York University's Stern School of Business, the major risks to the U.S. economy include "deleveraging of the household sector, high unemployment, a housing double dip, state and local government problems, and gridlock in Congress." Pushing these issues off to the future could cause a bond market revolt. High-growth developing countries are another source of risk. "Emerging markets are growing very fast," said Roubini, noting that there is a danger of their overheating.

Excerpts from the conference report appear below. To download the complete report, click here.

There is a growing consensus among experts that the underlying conditions that produced the crisis have not been neutralized. We managed to respond to the immediate threats of the financial meltdown and to avoid the most devastating scenarios, but the longer-term drivers of global instability remain active.

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