Learning from Catastrophes: Strategies for Reaction and Response

9. A Financial Malignancy

Suzanne Nora Johnson

Former Vice Chairman of The Goldman Sachs Group, Inc.

Overview

The financial crisis of 2008–2009 was a disaster that triggered a global economic recession, the most acute since the Great Depression of the 1920s and 1930s. This chapter highlights certain elementary attributes of this financial and economic disaster and suggests ways to recover. Given that much of the financial crisis was driven by governmental, institutional, and individual actions that undervalued or misunderstood risk, the chapter focuses on the “cascade of confidence” required to restore a better balance between risk and reward and growth and stability. This chapter describes six basic conditions required for the restoration ...