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| (Photo credit: Vicky TGAW) |
The true test of whether lessons have genuinely been learned from the financial collapse of 2008 is about to be tested as European governments (and the G8) discuss what to do about the recent downgrading in the credit rating of up to 16 Spanish banks.
Back in 2008, we were told that the use of government (i.e. tax-payers') money to bail out the British, American and other banks that were at risk of collapse was an exceptional response to exceptional circumstances; that it was a one-off act, never to be repeated in the new age of financial sobriety and austerity. No bank, we were told, will ever be too big to fail.
If such claims were true, we should expect to see no action at all taken by European governments, the European Central Bank and the International Monetary Fund over the problems faced by the Spanish banking sector. Indeed, we may well, depending on how serious the individual banks' liquidity problems are, see one or more of these troubled banks going bankrupt, rather than being propped up by more public debt.
And, while we're on the subject of likely scenarios, rumours are also circulating that Spanish pigs are learning to fly.
As Anna Morgenstern notes:
There cannot be a state in which the ruling class act against their own interests wholly and consistently.
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