Columbia International Affairs Online: Policy Briefs

CIAO DATE: 09/2011

The world economic crisis as a changed circumstance

Hermann Ferré, Kabir Duggal.

August 2011

Columbia Center on Sustainable Investment


In September 2008, the bankruptcy of Lehman Brothers sent financial markets in the United States into a spin. Credit markets froze as banks began to mistrust counterparties, not knowing the extent of toxic assets in loan portfolios that could lead to another major bank collapse. The crisis quickly spread around the world. Governments were urged to take drastic measures. Experts discussed the possible nationalization of portions of the U.S. banking industry and other sectors. Other countries also considered measures to save key industries.