The enduring lesson from centuries of boom and bust is that there will always be another financial crisis

 The worst financial crashes are often banking crises

The S&L crisis was triggered by a real estate crash that toppled the already troubled savings and loans association. The S&L crisis was also the most costly banking disaster until the US subprime crisis of 2008. 

Now commercial real estate is looming as a risk for banks once again. 

The first phase of any boom and bust cycle is marked by euphoria — the exuberant belief that asset prices will only rise. 

Lessons from the second phase of financial crashes — credible policies, deployed rapidly — are crucial. After just days in office, US president Franklin D Roosevelt in 1933 gave a radio broadcast. Backed up by legislation that guaranteed bank deposits, his actions ended a month-long bank run and turned the corner on the Depression.

Unfortunately this was not the case in the Japanese real estate crash of the early 1990s.

Linda Yueh FT 12 June 2023

https://www.ft.com/content/7f157d15-9bc2-41c9-bde4-7c8eb95026c8

The writer is the author of ‘The Great Crashes: Lessons from Global Meltdowns and How to Prevent Them’

https://www.amazon.co.uk/Great-Crashes-Linda-Yueh/dp/0241422752