Adam Smith Business School

Dr Giuseppe Telesca, European University Institute Florence

"15 years from the Global Financial Crisis. What memory is left?"
Wednesday, 13 December. 11:00 am
Room 141 ASBS

Abstract

Interviewed by The Times in the wake of ‘Black Monday’, the biggest single-day stock market debacle in history recorded on 19 October 1987, John Kenneth Galbraith, economist and author of a celebrated history of the 1929 Wall Street crash, explained that “financial memory, from one period of sophisticated stupidity to the next lasts for about 15 years”. On 15 September 2023 we celebrated the 15th anniversary of the Lehman’s collapse, which marked the official beginning of the Global Financial Crisis (GFC). Was Galbraith right? Is it true that the memory of the Lehman collapse has faded away? And how recent events such Covid-19, Russia's invasion of Ukraine, or the Silicon Valley Bank (SVB) collapse have affected the memory of the 2008 financial crisis? Whether there are good reasons that justify historians’ reluctance to deal with a subject in which personal experience, collective memory and historical analysis are still difficult to disentangle, this work represents one of the first attempts to deal with the memory of the GFC from the perspective of historians.

Far from aiming at exploring the collective memory of the GFC as such, the paper targets the memory of financial agents, a delimitation which explains why the research is mainly based on two newspapers widely read by the global financial elite – the Financial Times and the Wall Street Journal – and on a limited sample of the many books devoted to the GFC.

While results are still tentative, a few elements seem to emerge:

1) Despite what has been said about Covid-19 – a trauma that, in theory, should have erased from memory events such as the 2008 financial crisis – the data seem to suggest that the outbreak of the pandemic increased, rather than decreasing, references to the GFC;

2) The only period of proper engagement with the memory of the GFC seems to occur at the time of the SVB collapse (spring 2023). This confirms that past financial crises are more likely to be evoked in similar difficult circumstances;

3) Evocation of the 2008 crisis at the outbreak of Covid-19 (point 1), without engagement with its memory, except for spring 2023 (point 2), could mean that the 2008 GFC, rather than being remembered as an event per se, has come to represent a turning point from an era of optimism to one of 'polycrisis';

4) The ‘memory boom’ of the GFC, occurring in 2020–21, has been followed by a wave of recollection of the 1970s crisis in 2021–22, linked to the inflationary effects brought about by the post Covid-19 recovery and the rise in energy prices due to Russia’s invasion of Ukraine. This phenomenon has created a ‘memory clash’ between two historical analogies – the 2008 financial crisis and the 1970s crisis – bearing very different lessons for today’s policymakers

Bio

 

Giuseppe Telesca is research fellow at the Robert Schuman Centre for Advanced Studies, European University Institute, Florence, where he works on the ERC-funded project: ‘The Memory of Financial Crises: Financial Actors and Global Risk’. He has co-edited, with Youssef Cassis, Financial Elites and European Banking. Historical Perspectives (OUP, 2018) and has published on the memory of financial crises, the evolution of financial elites, the history of the Italian banking system, and the relationship between sport and business.

 

 

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First published: 4 December 2023