This week marks not just the tenth anniversary of 9/11 – it is also the third anniversary of 9/15, the day when Lehman Brothers collapsed. But while world politics is no longer dominated by the “war on terror”, a different form of terror is stalking the world’s financial markets.
The current mood among top financiers – the people formerly known as Masters of the Universe – is now more panicky than at any time since the financial crisis broke. Last week, George Soros warned that the European debt problem “has the potential to be a lot worse than Lehman Brothers”. Top bankers have been saying similar things in private for months. European politicians provide little cheer, either. One of the men charged with sorting out the euro, could be heard speculating last week about “a new Great Depression and the resurgence of nationalism”.
This gloom is even more worrying because there is little sign of effective international co-operation or global leadership to deal with mounting concern about the international economy. Without such leadership, there is a rising danger of a drift into protectionism and “currency wars”.