Are we ready for the next financial crisis? Lansons hosts expert debate with FSF

A full house and a diverse crowd at Lansons this week to see some of the country’s most high profile economic commentators discuss ‘Are We Ready For The Next Economic Crisis?’, a topic no one knew would be so pertinent when invitations went out from the Financial Services Forum over a month ago. Given the nature of the topic we expected a very lively debate, and weren’t disappointed as sparks flew.

First up to present his argument to the floor was Dan Atkinson, Economics Editor of the Mail on Sunday, who had uncompromising views on the state of the nation. “Are we ready for a financial crisis? No” he said. “Will there be one? Yes.”

Atkinson continued with his bearish theme, explaining that he saw the bubble in government bonds as the flashpoint for the coming crisis. Atkinson explained that the lack of inflation or political risk factored in to government bonds, coupled with the political flashpoints expected ahead, spell trouble for the Eurozone.

Dan’s gloom was countered by a more hopeful Hugh Pym, Chief Economics Editor of the BBC. Hugh started his summary of the current financial climate with the words “I come not to bury the UK but to praise it.” Despite the rain outside reflecting the economic uncertainty, Hugh ran through the list of statistics that indicate hope and growth for the economy, including VISA spending figures, retail sales up year on year and very successful Jaguar Land Rover results. Indicating the audience made up of financial services marketers, Pym took some time to focus on the fact that the UK has a strong financial services industry that has potential for growth providing services overseas. “We are the Global Forex capital of the world”, he said, and we must play to our strengths.

Next to the microphone was John Velis, Head of Capital Markets Research at investment consultant Russell Investments. Velis laid at the door of Eurozone politicians much of the responsibility for not steering the markets clear of a double dip. “Politicians simply don’t have the guts to make it past the painful medicine” he said. “We simply aren’t seeing any willingness for international politicians to get around a table and talk through the measures they must make collectively to ensure the least bad outcome.”

This point sparked the debate as Tony Langham, Chief Executive of Lansons Communications asked the other panelists if they placed the blame with politicians. Atkinson agreed with Velis that the deficit has become a cultural issue and has led to deadlock in America as politicians ensure their seats are safe in congress before making harsh cuts. “Most economists out there are media stars, rather than real economists” deadpanned Russell spokesperson Velis.

Answering a question from the floor, Pym concluded that Britain should be investing in it’s workforce to secure the future. “We’ve got a problem at the moment, but then so does everyone else. We are in challenging times, but we shouldn’t be too gloomy about it while there’s still growth”. “It makes sense to see Britain as a third world, undeveloped country” argued Atkinson. We give our natives beer money and pay real wages to skilled outsiders. Until this changes, our outlook won’t change.”

After much continued debate covering share price drops, monetary versus fiscal policy and the role of the media in the crisis, the lively session ended on a question from the floor. “If you were a global leader addressing the younger generation, which words of wisdom would you impart?” “Be passionate, as with passion and hard work, anything is possible, gave the upbeat Pym. “Don’t overstretch yourself on a house – look at the aspirations of teenagers from the 1980s and move yourself as far away from that as possible” answered Atkinson. “You can’t have everything that you want” said Velis. “Although I’m optimistic that we’ll learn from this market turmoil – we are animals with brains that will learn from experience.”