Last October, the former Deputy Chairman of the US Federal Reserve, Roger Ferguson, wondered what stage of the financial crisis we were in. His answer could not have been more discouraging: we do not know where we are; we are lost. Indeed, the collapse of Lehman Brothers had taken us into uncharted territory, which Mervyn King now calls the Great Panic of 2008.
From those days to today, we can say that we have made progress. We now know that we are in the midst of a global recession triggered by the crisis in the US financial system and later spread to the rest of the advanced economies.
