In 2006, I was honoured to be invited to join a project looking at scenarios for the financial markets, as an advisor to the World Economic Forum.
The first call I had with the project leaders, they asked me what concerned me most about banking?
I spent most of the time talking about concerns around systemic risk caused by the interlinkage of technologies, trading complex financial instruments globally in real-time. In particular the fact that should another Long Term Capital Management (LTCM) occur, it would be ten times worse as a result.
We never followed up that line of thinking as the project became one that provided more concurrence and substantiation of the current banking model, and how it would adapt to regulation and technology, rather than postulating that the current banking model was completely broken.
Now we know it was broken, that the systemic risk was there, that another LTCM would occur (it was Lehman Brothers) and the impact has been more than ten times worse. It has been cataclysimic.
I wonder what projects they will come up with this year, and can we ensure that they result in something useful this time?
Davos starts this Wednesday, and I'll be watching that space for sure.