While the consequences of the credit crunch appear all too apparent, the intricacies of the complex financial instruments involved, combined with the vast sweep of the global financial system, seem to defy explanation. Attempts to accuse negligent regulators, fraudulent brokers and greedy borrowers cast much blame but little light on the causes of the crisis.
Are the current problems a sign that the developed world has been living off credit for too long? The United States is still by far the world’s largest and wealthiest economy, so why for so long has it been reliant on credit supplied by the smaller and poorer economy of China? In the past 30 years, the UK economy has shifted away from manufacturing towards financial services. In many ways London is the pre-eminent world financial centre, but is this a source of weakness rather than strength, leaving the UK more exposed to financial crises?- Institute of Ideas
Phil Mullan is an economist and business adviser. Author of The Imaginary Time Bomb: Why an Ageing Population is not a Social Problem, he researches, writes and lectures on economic, demographic and business issues.
Formerly chief executive of the internet services company Cybercafe Ltd, which opened the world's first internet cafe, Cyberia, he currently works with a range of businesses. This includes a non-executive directorship with Easynet Group PLC, one of Europe's leading business broadband networking companies.
Dr Michael Savage is an investment banker with interests in financial economics and development. Prior to working in the City, Michael taught international political economy and studied international relations.
Stuart Simpson is the convenor of the Institute of Ideas Emerging Economies Forum - researching the economic, political and cultural impact of the dynamic growth of much of the developing world. He has published various articles on these themes in print and online publications, including the Independent, Die Welt, spiked and Novo Magazine.
Stuart has conducted research on behalf of the education charity WORLDwrite, on issues such as the impact of corruption and governance and the affect of debt relief on development.
Stuart is a qualified accountant and has worked in the financial services sector for many years. He is now employed by a leading European investment bank monitoring treasury and commodities trading activity.
Stuart is currently engaged in the study of financial mathematics at a postgraduate level.
Economist and business manager Phil Mullan says economic markets in the west have been hollowed out.
Economic growth has appeared to look good, but what is the quality of this growth? Mullan asserts economic activity in the west revolves around retail, property, and public spending, while taking advantage of manufacturers in the East.
Investment banker Michael Savage says that the crisis isn't a result of banks lending more money that they have but of other economies such as China and East Asian oil producers pumping money into Western economies.
Savage says, "I'd point the finger at the Chinese working class." "The Chinese should consume more, thats the way out of the crisis."
Economist and business manager Phil Mullan says don't blame China. Mullan says China has been keeping the US afloat, but text book economics says rich countries are supposed to support poor countries not the other way around.
Mullan says "America is the most indebted country in the world," but "presumes to be the world's economic leader," and has an economy based on "fictitious capital values."