It will soon be 10 years since the world got the first inkling that the global financial bubble was floating towards a sharp pin. On 9 August 2007, BNP Paribas froze three of its money market funds. Investors were not allowed to pull out money from these fronts. The bank implicitly admitted that it could not value the subprime mortgage securities that it held. Other banks got the message. European money markets froze in panic. Western central banks had to pump in liquidity to get the markets moving again.

It was the first salvo in a financial crisis that almost wrecked the global economy.

There is much to learn from the events of those frantic months, but none deeper than the damage done by banker hubris. The leveraged pyramid of complex derivatives was based on the assumption that the fancy models to value financial assets were actually depictions of reality. The overconfidence of bankers—fed by regulation lite—led to a mess that taxpayers in the North Atlantic countries are still paying for in terms of stagnant growth as well as massive public debt.