It is usually assumed that financial markets have a short memory: crises are quickly forgotten and excessive risk-taking replaces caution as new business and profit opportunities arise. But are financial crises actually remembered and if so, how, for how long, and by whom? Surprisingly, there has been very little attempt to answer this question, which is very important if we want to understand not only the causes and consequences of financial crises, but how the modern financial system has been shaped.
This project is a step in this direction. It explores the extent to which the memory, or absence of memory, of previous financial crises can explain certain practices within the financial system. This will provide a major contribution to the understanding of the causes of financial crises, in particular the Global Financial Crisis of 2008, by helping to unravel the rationale behind financial actors’ actions and decisions and how they may be connected to their previous experiences.
The project addresses four main questions: How are financial crises remembered? Has the memory of financial crises had an impact on the thinking and behaviour of financial actors? Has a ‘new’ financial elite emerged in the late twentieth and early twenty-first century? What has been the legacy of the Global Financial Crisis?
Using the concept of cultural memory, the project analyses how the most severe financial shocks of the last hundred years (1929-33, 1982, 1997, and 2007-9) have been remembered. The memory of financial crises will be retraced by exploring five interrelated areas, with five objectives in mind: capturing senior bankers’ own views on financial crises; producing a first collective biography of the financial elite in the late 20th and early 21st century; drawing a much clearer picture of the vision of financial crises prevailing in the financial world and its evolution in the second half of the 20th century; throwing a new light on the place of financial crises in the teaching of economics and finance; and opening new perspectives into the history and memory of financial regulation.
