More than a year after the bankruptcy of Lehman Brothers and the ensuing financial market turbulence, we are at a critical crossroads. I think the post-crisis path will be bumpy, mainly because bail-out programmes have not been implemented in the right sequence. We can see the cart has been put before the horse: money has been pumped in continuously to cover the risks and ease the panic, but we are still far from cleaning up the balance sheets of western financial institutions.
When people talk about exit strategies without thinking about the huge amount of legacy assets on the balance sheets of the significant financial institutions, we know that the situation is dangerous.
