How prepared are we for the next crisis?

Some 10 years ago, Lehman Brothers filed for bankruptcy. On September 29, 2008 the Irish Government announced a blanket guarantee of all the liabilities in the Irish banking system.

Finance Minister Brian Lenihan, persuaded that the country faced a financial liquidity rather than solvency crisis, bet the house and the wager then backfired.

In the words of Lorenzo Bini Smaghi, a member of the ECB’s Executive Board, “it turned a banking crisis into a sovereign crisis”.