Greg Hands, Chief Secretary to the Treasury said that the banking crisis led to what he called the 'great recession' and 'misery to millions of families'.
At such times, governments find it convenient to claim that it's poor people who cause the 'misery' and one group of poor people easiest to identify as the 'problem' are migrants. Politicians and willing press people unleash hosts of stories which claim that it's migrants that cause you 'misery'.
However, if you comb the business pages, you find that it's another kind of migration that causes the walloping great crises.
The migration of money - sometimes called 'investment'.
Here's an article from the Economist which was looking at why 'foreign investment' by British banks has slowed since 2008. The interesting bit is where it explains that our bit of the crisis here in the UK was caused by....foreign investment, our banks being 'exposed' overseas.
So, the 'misery of millions of families' was caused the migration of money, was it? Funny how that doesn't make the front pages of the Sun, Express, Telegraph, Mail....
"Businesses were increasingly operating across borders and needed banks that could travel with them. America and Britain, which excelled at finance, were anxious to market their expertise abroad. A more integrated global economy also needed a financial system to funnel capital from countries with a surplus of savings to those with a surplus of investment opportunities. Banks had long played that role within countries, taking in deposits in one market and deploying them in another. It made sense to do the same thing across borders.
Financial globalisation did just what it was meant to, perhaps a little too well. Cross-border bank flows expanded enormously between 2000 and 2007, with 80% of the increase coming from Europe, according to McKinsey. Those flows enabled debtor countries such as America, Spain and Greece to finance housing booms and government deficits without paying punitive interest rates. But a large part of those flows reflected banks’ own leverage as they both borrowed and lent heavily abroad.
Tellingly, the event that touched off the crisis in the summer of 2007 was an announcement by France’s BNP Paribas that it was suspending redemptions to an investment fund heavily invested in American mortgage securities. Eventually a number of banks across Europe needed government bailouts because of losses sustained on mortgages in America and elsewhere.
The cost of bailing domestic banks out of foreign misadventures exposed one risk of financial globalisation; the losses sustained by domestic creditors and savers when foreign banks went bust showed up another. In 2008, when Landsbanki, an Icelandic bank, went bust, British and Dutch depositors had to be bailed out by their own governments because Iceland would guarantee only Icelandic deposits. Sir Mervyn King, the former governor of the Bank of England, famously commented that “global banks are international in life but national in death.” "