Dominique Strauss-Kahn, former chief of the International Monetary Fund, warned that nations at present are unprepared to handle another financial crisis as big as the Lehman Brothers back in 2008. The ex-chief said a big factor of unpreparedness is because of the rising populism at present.
Strauss-Kahn said the world is currently unprepared to face another financial crisis that could be as big as the Great Recession compared to ten years ago. While governments have made some progress in managing banks capital ratios, government financial policies at present are insufficient, the ex-IMF chief said as quoted by The Local, citing an exclusive interview with Agence France Presse.
The collapse of the Lehman Brothers in 2008 is still being touted as the largest bankruptcy of its kind in history. The global financial services firm filed for bankruptcy at a time when it has $639 billion in assets and $619 billion in debt.
In 2017, a study conducted by insurance company Country Financial found that there was still one in three Americans who had yet or would never ever recover after the 2008 financial crisis. The report revealed that 25 percent of women, 26 percent of African-Americans, and 37 percent of low-income people bear the brunt of the Great Recession, unable to pay their bills within one month of unemployment.
Strauss-Kahn said after 2012 to 2013, governments were no longer concern about regulating the economy. The countries have this "non-thinking" attitude towards globalization. Worst, coordination between countries is mostly neglected. There is no institution, not even the IMF, not the EU, and the United States wanted to play the role of being the coordinator or the negotiator among nations.
The ex-IMF chief said U.S. President Donald Trump's present policies are not helping either. Strauss-Kahn, in fact, believed that Trump's election may have been one among the many consequences of the 2008 financial crisis. He believed the growing populism at present is the direct outcome of the financial crisis; hence, people now would want to favor solutions that were going to "increase inequalities."
Strauss-Kahn had rather challenging years and years after working for the IMF. He was the chief for IMF when the Great Recession peaked in 2008. He resigned from his position in 2011 after being accused of attempted rape in New York. Though all rape charges were later dropped, the ex-chief found himself yet again into a similar situation when he was investigated for aggravated pimping. The case went on until 2015 when the court acquitted him of the charges.
