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Not quite 1933
Where is all this money, all this electronic money that’s gone missing? How has it gone missing? Who is accountable for it? None of this is happening. ‘Winston’, 47, jobseeker from Stanmore (on the outskirts of London), speaking about the slump
The storm came out of a clear blue sky. In his 2007 Budget speech, Chancellor Gordon Brown could boast that Britain was enjoying ‘the longest period of economic stability and sustained economic growth in our country’s history’, just before he moved unchallenged into No. 10 Downing Street.1 The long expansion in the US economy had been briefly interrupted by 9/11, but felt just as assured. Few outside the financial sector discerned the first whispers of a credit crunch during that notably wet English summer,2 but then September brought something unseen since 1866 – a run on a British bank. It was not yet obvious that the queues of savers that formed outside branches of the smallish, provincial Northern Rock represented a threat to the financial universe as we knew it. But a year later – almost to the day – Lehman Brothers came crashing down in New York, heralding the start of the most catastrophic phase of the crisis. Within weeks, America’s biggest insurer, AIG, the Washington Mutual Bank and Britain’s own financial giant, RBS, would be respectively bailed out, bust, and bought up by the taxpayer.
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