The Great Debate UK
–Laurence Copeland is a professor of finance at Cardiff University Business School . The opinions expressed are his own–
The title says it all: “This Time is Different” by Reinhart and Rogoff tells how, for centuries, monarchs and, later, nation states have persuaded lenders to forget their chequered credit record and trust them yet again with loans on relatively easy terms. Although, by the nineteenth century, Western European countries had mostly reached a stage where their reputation seemed worth preserving at some cost, more or less from the moment they achieved their independence the South American countries established a tradition of default which they have guarded jealously to the present day, and as Reinhart and Rogoff make clear, Greece has defaulted at regular intervals ever since it became an independent nation in 1832.
Yet the tale they tell flies in the face of common sense, as well as running counter to the faith in the rationality of capital markets which used to be widespread but is now confined to a diminishing band of true believers. After all, with such spotty credit records, you would expect sovereign borrowers to be able to raise loans only by paying prohibitively high interest rates. Yet however much attention they may pay to credit history in their consumer lending division, when it comes to sovereign borrowers, bankers seem to believe with Henry Ford that history is bunk, or as the CEO of the world’s then-biggest bank put it in the 1970’s: “Countries don’t go bust”.
Sure enough, this year, lenders have finally come to their senses with respect to the euro zone countries, but not before our bankers – yes, the ones whose skills are as rare as those of a Lionel Messi and need to be rewarded accordingly – had lent them vast sums at interest rates that took no account whatever of their respective creditworthiness, and indeed they are still doing the same with their lending to Britain and America.
The following is a guest contribution. Reuters is not responsible for the content and the views expressed are the authors’ alone. Ibrahim Kalin is senior advisor to Turkish Prime Minister Tayyip Erdogan. This article first appeared in Today's Zaman in Istanbul and is reprinted with its permission.
By Ibrahim Kalin
Has multiculturalism run its course in Europe? If one takes a picture of certain European countries today and freezes it, that would be the logical conclusion.
- Alan Beattie is world trade editor at the Financial Times, and author of the recent book “False Economy: A Surprising Economic History of the World”. He studied history at Oxford and economics at Cambridge, and worked as a Bank of England economist before joining the FT. The opinions expressed are his own. -
Those who forget history are condemned to listen to historians going on and on about it, a fate almost as bad as listening to economists doing the same. (And I write as a double agent with a foot in both camps attempting the delicate task of bringing the two together in my new book)
A thought-provoking new book on Christianity's "lost history" holds that one of the central causes of 14th century religious persecution may well have been climate change. You can read my interview with author Philip Jenkins about "The Lost History of Christianity: The Thousand-Year Golden Age of the Church in the Middle East, Africa and Asia -- and How It Died" on the Reuters website here.
"The Chronology of Christian sufferings under Islam closely mirrors that of Jews in Christian states," he writes, noting that "Around 1300, the world was changing, and definitely for the worse."