What the FT’s outgoing biz editor learned from the crisis

Sarah Gordon, the outgoing business editor at The Financial Times, writes about what she learned in her nearly 20 years at the business newspaper.

Gordon writes, “At the FT as elsewhere, we had missed most warning signs. Looking back on what I wrote for the FT’s Lex column in the run-up to the crisis I am struck by my — and colleagues’ — relative complacency. I warmly praised the decision by Spain’s construction companies to diversify overseas (a leading cause of their downfall), and forecast an “undramatic” divergence in European sovereign debt spreads. We thought we were sceptical observers, pointing out dangers that others were not clever enough to spot. Maybe not . . .

“This was a salutary moment for me, because it reinforced a lesson I had been learning since working in the City of London and on Wall Street in the 1990s: that the failures which led to the crisis were more of behaviour and character than of financial instruments or processes. The tales of casual greed and of ordinary people misled and deceived by irresponsible bankers are familiar. But there was one element to the crisis that I have seen repeated in many different forms: overweening power. In the business world this breeds all sorts of crises, from the personal to the systemic.”

Read more here.