By Mark Fairlie.

Gordon Brown, the former Prime Minister told the BBC that the world isn’t ready to handle the next financial crisis. Mr. Brown suggested that economies around the world wouldn’t be able to manage the next big financial problem because of a breakdown in global co-cooperation. Because of this lack of international collaboration, the world would struggle to properly handle any financial threats in the future.

The former prime minister said “I feel we’re sleepwalking into the next crisis” in an interview on the 10th anniversary of the last major financial catastrophe.

Mr. Brown went on to say that he believes some of the bankers involved should have been sent to jail for their misconduct.

Gordon Brown commented that

“this is a leaderless world and I think when the next crisis comes, and there will be a future crisis, we’ll find that we neither have the fiscal or monetary room for manoeuvre or the willingness to take that action.

“But perhaps most worrying of all, we will not have the international co-operation necessary to get us out of a worldwide crisis”.

The world’s last financial crisis

In 2008, Wall Street bank, Lehman Brothers, filed for bankruptcy protection under chapter 11, Merrill Lynch sold itself to the Bank of America, and AIG, an insurance giant, sought emergency funding to survive.

The collapse and uncertainty of these major brands and companies triggered uncertainty in the global financial market and marked the start of the world’s last financial crisis.

After the collapse of Lehman Brothers, the UK government took swift action. The UK made the argument for using taxpayer’s money to inject new capital into struggling banks by funding Lloyds, RBS and HBOS.

Gordon Brown was the prime minister of the UK at the time of the financial crash. At the time, Mr. Brown said that to avoid the destruction of trust in financial markets, government and regulators should collaborate to protect investors’ money and kickstart global economic activity.

However, Mr. Brown has now said that this coordination is no longer a possibility for future financial problems.

Mr. Brown said,

“but now with the trade wars, the disagreements over climate change, the nuclear deals that have fallen apart there is no spirit of co-operation – there is division and protectionism and I fear a new crisis would see nations trying to shift the blame to each other.”

Gordon Brown warns about upcoming financial crisis

What punishments did banks face?

Although using taxpayer money to bail out bankers with very large salaries was heavily criticised by the public, Gordon Brown still insists that this move was completely necessary.

However, Mr. Brown has voiced his frustration at the lack of harsh penalties given to the bankers who were involved in the financial crash.

Mervyn (Lord) King, the former governor of the Bank of England, publicly criticised the government’s regulatory regime which moved bank supervision from the central bank to the Financial Services Authority.

Mr. Brown replied to this by admitting that, although the design didn’t work perfectly, it was designed to watch over isolated outbreaks of distress within banks. The global financial crisis was not a contained problem within one bank but an international issue.

The former prime minister said that no national warning system was in place to check the state of the world’s finances and this meant that no single country could have properly handled the crisis.

The BBC said that Gordon Brown painted “a grim picture” of the world’s ability and readiness to handle the next financial meltdown in his interview.