In the News Teaching Activity –Financial market failure that led to the Global Financial Crisis 2007-9 (Dec 2023)

Alistair Darling proved to be a calm Chancellor of the Exchequer during the storm of the Global Financial Crisis in 2007-9, an important event in economic history.

According to Larry Elliot in the Guardian, Alistair Darling, former UK Chancellor, faced a pivotal moment in October 2008 during the financial crisis when Royal Bank of Scotland (RBS) was on the brink of collapse. Swiftly responding, Darling orchestrated a rescue plan involving public ownership of RBS to prevent a catastrophic impact on the entire economy. Overcoming challenges inherited from Gordon Brown and navigating the financial crisis, Darling implemented measures such as recapitalising banks. Elliot argues that despite a successful bailout, Labour's defeat in the 2010 election and subsequent austerity measures by George Osborne interrupted the economic recovery Darling had initiated. The GFC was a major economic event caused by financial market failure.

How underrated chancellor Alistair Darling helped weather financial crisis | Alistair Darling | The Guardian

1 What was the global financial crisis and how did it affect economic growth?

2 What financial market failures contributed to the GFC?

3 Discuss the advantages and disadvantage of bailing out the banks during the GFC.