Ten years have passed since the U.S. Federal Reserve Bank allowed Lehman Brothers to file for bankruptcy, attempting to signal to the market that no firm is too big or important to fail. That mistaken belief triggered panic across the global financial system. The next day, a chastened Fed decided to rescue AIG, the insurance colossus ensnarled in a credit default swap tsunami that threatened to bring down much of the financial system with it, beginning with Goldman Sachs.
The media waves are filled with analyses of causes and expert testimony on what's changed, and questioning if it can happen again. Unfortunately, most of this decade on analysis fails to go deep enough to assess true root causes that lie in issues like purpose and systems design principles. Without such analysis, we can say with confidence, as many pundits agree, that it can and will happen again.
To avoid such an outcome, to which governments are far less capable of responding than they were ten years ago (perhaps one of the most dangerous consequences of the crisis), we must fully internalize four fundamental lessons from the crisis: