Lessons from the Financial Crisis, Part Two: What Can Be Done?

In his commentary Martin Schütte, former HypoVereinsbank/Bayer. Hypotheken- and Wechsel-Bank and University of Munich, notes that five years after the onset of the financial crisis, the latter may have become a government debt crisis, but the reasons for this crisis - as well as the risks and measures required to address it - remain largely the same as they were at the outset. For the main players, namely governments and central banks, have adopted the rightly castigated behavioural patterns, instruments and products, as well as the market manipulation used at the time, on almost a one-to-one basis. In his opinion, the policy pursued by governments, the EU and the ECB to date cannot solve the debt crisis. Extensive debt restructuring of the indebted states must take place, the option to exit the euro and rejoin at a later date must be made possible and the unification process – by all means featuring different groupings – should be pursued further.