The first anniversary of the collapse of Lehman Brothers has provided a broad range of politicians, regulators and commentators with the opportunity to remind us of the incredible scenes we witnessed last September as one of the world’s leading banking institutions simply disappeared from sight.
In the weeks and months since last autumn, we have witnessed a concerted global effort to understand how such a turn of events could have occurred and to identify ways in which our regulatory regimes should be overhauled.
There have been recent reports that the government is planning to introduce legislation later this year which will require UK banks to create so-called “living wills” in order that they can be more easily taken apart in any new financial crisis.
And in the US, President Obama has called for the financial sector to join in a “constructive effort” to update the rules and regulatory structure to meet the “challenges of this new century”. This includes the establishment of a new Consumer Financial Protection Agency.
This is all very reassuring and, of course, good news for those of us who are lawyers, accountants and other professional advisers who are likely to benefit from the increased work which these changes will bring.
However, even assuming that the changes being made are the right ones, it remains to be seen whether simply tightening up the regulatory framework is going to be sufficient to ensure that the financial crisis, from which we are only just beginning to extract ourselves, will not be repeated again.
Rules and regulations are clearly important factors in helping to shape our behaviour, but what is also needed is a change in the culture which permitted the current crisis to occur.
It is easy to focus our attention on the question of bank bonuses, but this is only part of the story.
Given their size and importance, we also need our larger banks to go beyond consideration only of the interests of their particular institutions. They need also to take account of the impact which their decisions may have on the wider economy — whilst, of course, continuing to act in the best interests of their shareholders.
In doing so, they will regain the confidence of the wider public and, hopefully, help all of us to avoid another Lehman Brothers.
Jonathan Morris is a partner at the international law firm Berwin Leighton Paisner LLP