Harvard Business Publishing

What has been interesting here in Europe has been the complete and obvious lack of c9o-operation and unity among EU leaders. First Ireland, then Greece, then Denmark and Germany have taken a 'beggar thy neighbour' approach, throwing member states' markets into turmoil. So much for the great deam of European unity!

Only today have they realised they have to do something and all 27 have signed an EU-wide pact to work as a team. But I'm afraid this seems like all talk - acting after the horse has bolted. The last few days have clearly exposed the lack of will and structures for dealing with cross-border financial crises.

John P

Western democratic capitalism on the edge of the precipice. Recession is certain. Depression, which would bring years of misery to tens of millions on a scale not seen since the 1930s, is possible. The system may yet recover but economic power has shifted forever east, to Russia, the Middle East, India, China and the Tiger Nations. With the exception of India none are true democracies. We are moving back to a world dominated by centralised economies. In a century what will historians say about the catastrophe known by that friendly little phrase, the credit crunch? They will say political leaders lacked confidence and decisiveness but there were more important failings, shared by leaders since the advent of globalisation in the 1980s: cowardice and vanity. The cowardice was the refusal to control the spivs in suits who turned banking into a global casino, where winning bets paid vast fortunes and losing bets merely paid a great deal. The vanity was the enjoyment of power that came from the fragile prosperity of the casino years. If there had been any great leaders in the West - and there were none - they would have tackled and controlled the bankers. Future leaders must fight for what is right and oppose what is wrong. A few months ago such talk would have been ridiculed in boardrooms and trading floors and, dare I say it, in the lecture halls of the business schools. Who would laugh today as many millions of people, who worked hard and saved diligently, prepare to pay for the greed of the financiers and the cowardice of politicians.

It is definitely interesting to observe leaders in times of crisis - you really get to see what they are made of.

In my experience leaders often focus their energy on resolving an issue but forget to put much effort into communication. If people don't know what they are working on then they will make their own assumptions....

Chris
http://learn2develop.blogspot.com

Today it looks like the financial system will survive. Let no one doubt however how close it came to total collapse,an Armageddon which would have made the Great Depression of the 1930s look like a pleasant interlude. Indisputably the political leaders who allowed this to happen - and they include not only today's wretched and incompetent crop of Presidents and Prime Ministers but the Thatchers, Blairs, Reagans and Mitterands of the past - must take much responsibility. They allowed men and women who combined staggering stupidity with staggering greed to run the system. The challenge for the new leaders who will surely take their place is to ensure that the financial world of the future is led by people of talent and integrity. If we allow the similar rogues to run our money markets then disaster will strike again and next time we might not be so lucky. As others have already said tens of millions of ordinary people around the world will pay for this over many years to come and power has shifted to the east. But sadly nothing can be done about that.

Let's hope it is not business as usual after this mess. Having spent time with academic business gurus I would like to see them take the lead in researching what went wrong. That means less impenetrable theorising about supply chains and matrixes and more about basic sound business practice.

Thanks for all the comments – these are interesting times!

John, you are right to point out that Europe’s leaders have failed to pull together to deal with the financial crisis. The EU was originally established as an economic union, yet 56 years after its formation, its leaders have been lacking in n their response to arguably the greatest economic threat it has ever faced.

“If there had been any great leaders in the West - and there were none - they would have tackled and controlled the bankers. Future leaders must fight for what is right and oppose what is wrong.”

Angus, I agree, although the signs here are that things might be changing. Both Angus and Peter might also be interested to read today's London’s Evening Standard (http://www.thisislondon.co.uk/standard/article-23569789-details/Brown+at+war+with+the+City/article.do). Gordon Brown has made an unprecedented attack on excessive and irresponsible City greed. The days of big bonuses are over, he says and bankers guilty of taking excessive risk with other people’s money, should be punished.

Chris: thank-you for reminding us that crisis shows us exactly what our leaders are made of – I shall be picking up this theme in my next column.

Here in India, the crisis has been effectively tackled, I should say. The Federal Finance Minister, has been talking to the market, and the central bank has acted promptly.

However, other crises like the Indian nuclear co-operation deal, containment of internal security threats, communal violence beg decisive, determined and inspiring leadership.