Big crisis, hard data. Numbercrunching some tough times.

© Copyright 2014 London Business School

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From 2002 to 2007, theamount of credit in theUnited States went from

$22trn to $37trn– a 70 per cent increase.

Source: gov.uk

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The rise and rise of crowdfunding. From late2010 to the second quarter of 2013, the

three major peer-to-peer lenders in the UK –Zopa, Rate Setter, and Funding Circle – lenta total of £378m. In the US, the LendingClub, founded in 2007, has originated over

$2bn in personal loans.

Sources: lendingclub.com; theodi.org

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In 2013, the world’s largest reinsurer,Munich Re, predicted that from 2012 to2020 the property-casualty insurancemarket would grow by 50 per cent to

€1.85trn, and the life insurance market bytwo-thirds to €3.1trn. Giving a globalinsurance market pushing the

€5trn mark. Source: munichre.com

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King of the Ponzi.On 11 December 2008, FBI agents

arrested Bernie Madoff, financial adviserand investment manager. Madoff wascharged with one count of securities

fraud. The net amount lost due to fraud isestimated to be between $10bn and$17bn. On 29 June 2009, Madoff wassentenced to 150 years in prison.

Source: justice.gov

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When the trillion-dollar global financialservice industry misfires it causes a lot ofdamage. In an effort to keep the Eurozonetogether, and prop up the European bankingsystem, the European Union and IMF havebailed out several nations, most notablyGreece to the tune of €246bn, with a third

tranche of funding still to come.

Source: dallasfed.org

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On 27 June 2013 Barclays Bank was fined justover £290m by UK and US regulators for itsinvolvement in the attempted manipulation ofthe Libor and Euribor interest rates. It was notjust Barclays, either. Eighteen banks were onthe panel for setting Libor. Of those banks UBShas also been fined, and other fines may follow

as investigations continue.

Sources: bbc.co.uk; bbalibor.com

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£109 billionIn 2012 the financial and insuranceservices sector contributed £109bnto the UK economy (gross valueadded) and accounted for over 10per cent of total UK tax receipts.

Source: gov.uk

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SIXHedge funds have had a huge impact on the

investment world, enjoying vast growth in the 1990s.In June 2013, the total of funds under management

was estimated at $2.4trn globally.Now regulators in Shanghai have agreed to allow sixhedge funds from the US and the UK to raise $50meach from Chinese institutions to invest around theworld, in a move that signals the continued opening

up of the Chinese financial markets.

Sources: dealbook.nytimes.com; towerswatson.com

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QUADRILLIONThat’s a one with a lot of zeros – 15 to be precise.Add a Yen currency sign and you have the

Japanese debt milestone passed in August 2013.That’s over 200 per cent of Japan’s annual

economic output, and has prompted a massivefinancial stimulus programme, dubbed

Abenomics, aimed at reflating Japan’s economyand improving the country’s debt ratio.

1,000,000,000,000,000

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$920millionGlobal financial services giant JP MorganChase agreed to pay four regulators in theUK and US, fines totalling $920m. The finesrelate to oversight failings as the firmracked up $6bn plus derivative losses in2012, known as the “London Whale” trades,after the nickname of a trader involved.

Source: bbc.co.uk; occ.gov

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$14TrillionA report by the Federal Reserve Bank ofDallas estimates that the 2007-2009financial crisis cost the US between$6trn and $14trn. Or, in figures easier torelate to, the equivalent of $50,000 to$120,000 for every American household.

Source: dallasfed.org

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2019The Third Basel Accord (Basel III) is aglobal regulatory standard on bankingcapital requirements, liquidity and

leverage ratios, designed to avert a rerunof the recent banking crisis – assumingthat it is implemented. Originally due by2015, its full introduction has been pushed

back until 2019.Source: bis.org

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1986A package of financial services regulatoryreforms came into effect in the UK in 1986,following changes to the London StockExchange’s rules on 27 October 1986.

Known as the Big Bang, it transformed theglobal financial services industry and,

some say, was one of the main catalysts ofthe financial crisis.

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The vital statistics from the financial crisisand beyond were first published in BusinessStrategy Review Volume 24, Issue 4, 2013.

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