It has been five years since the collapse of Lehman Brothers, an investment bank in the United States, launched the global economy into one of the worst financial crises of all time. Since then, the United States and many other major global financial institutions have taken big steps in securing a safer worldwide financial state. The United States, along with many other countries, have made many reforms that will allow the global financial situation to become more protected. However, there are new areas in the world which could threaten the state of global finance.

The crisis in 2008 was caused by high debt, faulty regulations within banks and financial industries, and low government assistance. A large part of the crisis was brought about by slow government action. Governments were unsure of how to react to bank failures, as well as the crisis as a whole, and without reforms their economy would fall fast.  Consumer confidence was lower than ever, creating slow growth and further damaging the global economy as a whole. Countries like Australia and Brazil made quick reforms allowing them to keep up with the current state and avoid any major damage. On a global scale, major reforms like the new Basel regulations have helped correct poor banking strategies and high debt accumulations.  

But is it all over? As the global economy recovers from the crisis, there are still countries that pose a threat to the current stability. Most of the danger lies in Europe. Bank failure after bank failure in Europe has investors spooked, and this has stunted growth in most European countries. Stricter banking regulations must be enforced in order to gain more control over the long run. As governments must step in and bail-out or reform their respective economy, it is unclear whether this could be another disaster similar to the crisis in 2008. What do you see in the future of global finance? What steps need to be taken in order to ensure that global finance is protected from another catastrophe?

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