This financial crisis has been unique in a number of key respects. First, it engulfed all regions and all asset classes. Second, the blow struck at the heart of the capitalist system: the financial sector. Third, it created a “balance sheet recession” where a majority of economic agents devote most of their resources to paying down debt. Fourth, predicting how the feedback loop between asset markets and the real economy will operate is hard.

From here, some things look set to change no matter what. We will see more oversight. Financing will be less freely available and at higher costs. The use of leverage will come under closer scrutiny. Notions of safety and prudence will play a bigger role. Robust growth and low inflation and the feeling of confidence/safety they generated will be left behind. As (macro economic) policies shift away from laisser faire, the global economy will become less efficient. Growth will be lower, which will make it harder for central bankers to reach their inflation goals.