It is well known and understood that the nation’s money supply overwhelmingly consists of deposits within bank accounts of an intangible entity known as bank credit money. This form of money is interchangeable with currency (coins and banknotes) on demand. It fluctuates according to economic circumstances, and its dynamic is one of continuous creation and destruction.
However there is a widespread belief that credit money is only created by commercial banks when they lend to their retail customers. The reality is that bank credit money is created and destroyed by a variety of routes. These include:
Credit money creation:
(1) Retail bank lending
(2) Bank spending into the real economy
(3) Bank purchase of assets from the non-bank private sector
(4) Government spending
(5) Government lending to the non-bank private sector
(6) Reserve Bank purchase of assets from the non-bank private sector
Credit money destruction:
(1) Repayment of bank retail loans (principal and interest)
(2) Any other payment to banks from the non-bank private sector
(2) Government sale of Treasury securities to the non-bank private sector
(3) Taxation receipts obtained from the non-bank private sector
(4) Bank sale of assets to the non-bank private sector
(5) Reserve Bank sale of assets to the non-bank private sector
(6) Repayment of government loans by the non-bank private sector
Modern monetary theory (MMT) offers an analysis of the flow of money within our economy, and in undertaking this task it proceeds from some basic assumptions, including the propositions that bank credit money and banking reserves are (a) destroyed when federal taxes are paid and when Federal Treasury securities are issued to the non-government sector, and (b) created when the Federal Government spends into the non-government sector. This article examines what the analysis implies within an Australian context, although the ideas and conclusions are more generally applicable. However we must firstly define what is meant by money.
- What is money?
Most economic textbooks tell us that money is any entity which (a) is accepted and used by the public as a means of payment for taxes and debts and for purchasing goods and services — in other words it behaves as a medium of exchange; (b) can be used as a store of value; and (c) possesses a unit of account (which in Australia is called the Aus Dollar). There is also an implication that the range of monetary transactions occurring and permitted within the real economy will embrace an adequately sized marketplace of players.
There exist three widely recognised forms of money:
(a) Currency, by which we mean coins and banknotes.
(b) Bank credit money, an intangible form of money created by commercial banks in the accounts of their retail depositors.
(c) Banking reserves (exchange settlement funds), created in the depository accounts of commercial banks with the Central Bank (CB).
Items (a) and (c) are collectively sometimes referred to as the monetary base. The “money supply” – meaning money accessible and used by the nonbank sector – can be defined in various ways, the simplest definition (called narrow money) being the conjunction of bank credit money and currency in the hands of the nonbank sector.
- The Federal Treasury is not a bank
A number of economic commentators have suggested that the Federal Treasury behaves like a bank. In my opinion such a viewpoint is wrong, for the following reasons:
(a) Treasury does not take deposits from the public, or from the commercial banks.
(b) Treasury does not directly create credit money in the accounts of nonbanks (i.e. by contrast with commercial banks). When Treasury spends, it instructs the Central Bank to transfer reserves to the payee’s bank, which authorises that bank to create new credit money in the payee’s account.
(c) Unlike commercial banks, Treasury’s primary role is not the creation of financial assets via retail lending or the acquisition of commercial profit.
(d) Treasury does not lend reserves to commercial banks (i.e. by contrast with the latter, which often lend reserves to each other).
- Are Federal Treasury’s CB credits a form of money?
Given that the Federal Treasury is not a bank, the credits in its account with the Central Bank cannot be banking reserves (unlike those of commercial banks). And clearly these credits do not consist of bank credit money, which can only exist within the depository accounts that commercial banks make available to citizens and businesses. Neither is it currency, because it has no tangible form. So the question arises, are these Treasury credits a form of money in any sense at all? Officially, they are not a form of money for the simple reason that they are excluded from the monetary base and also from every measure of the money supply.
The following propositions relate to this question.
- A monetarily sovereign entity, i.e. one which has the power to create and destroy money, has no use for that money — and in particular does not need to store it.
- If the Federal Government Treasury is not a bank, then its “deposits” in the Central Bank necessarily have a different status to the deposits of commercial banks in the central bank.
- One of the essential requirements of any entity entitled to be called money is that it is used by (traded, loaned/borrowed between) a sufficiently large number of marketplace players who have similar status and objectives in regard to those operations. Bank deposits in the Central Bank satisfy this criterion, since all of the players are in competition with each other with the common objective of maximising their financial profit. In contrast, the Federal Government maintains an account with its Central Bank for a quite different purpose, and its spending has a different objective.
- These days Federal Australian Treasury bond sales do match net spending (deficit spending), and so appear to top up the notional Treasury balance at Australia’s Central Bank – the Reserve Bank of Australia (RBA). However this is a relatively new development, having been introduced in Australia under the guise of ‘sound financial policy’ in 1982, and is not the practice in some comparable economies, such as Canada. Thus the Australian Treasury has not, since 1982, borrowed directly from the RBA – by selling bonds directly to the RBA or by using any other accounting mechanism (sometimes described as Overt Monetary Financing). Prior to 1982, it did sell bonds directly to the RBA, which meant – to take the logic to its obvious limit – that any number appearing within the government account at the RBA was rendered functionally meaningless. The post-1982 voluntary constraint on government-RBA relations does not in any sense undermine monetary sovereignty, but it does appear to do so – by obscuring the fact that the Australian Government cannot ever become insolvent in its own currency, and is not limited by its ability to attract ‘money’ into its account at the RBA.
- The situation in the United States is a little different, in that the constraint on direct borrowing by the Federal Treasury is not voluntary, but is enforced by legislation. However even in this case the constraint may be easily bypassed if there happens to be a need to do so. Within Australia and the U.S. there exist statutory regulations to the effect that, whenever a difference over policy exists between Treasury and CB which cannot be resolved by negotiation, the will of Federal Treasury will ultimately prevail. So even if there happened to be a legislative constraint on direct borrowing, the Treasury could – if it so wished – issue a quantity of new bonds to the private sector and arrange for the CB to buy the same quantity of bonds from the private sector. The net result is obviously the equivalent of direct borrowing.
- The economic mainstream hold that the Federal Government’s “deposits” in its Central Bank account are a form of state fiat money, moreover one which is interchangeable with reserves. However the above propositions imply that such “deposits” are not money in any real sense of the word, but are merely accumulated credits in an operating account. An operating account records a financial reality, but this does not imply that it is a form of money in a functional sense.
On this basis it may be held that the central government stands alone – that is, not in competition with any other entities possessing accounts with the central bank, and that the entries in the Government’s RBA account do not function as money.
If our national Government was to spend more than the currently budgeted amount on your health care system next year, it would be good to know how they would finance that spending. It is a question that advocates of more health spending are always likely to be asked. More generally, exactly how is the total public spending which is currently budgeted for across the next year going to be funded? Do the various charts you see, linking the total tax take and government borrowing to items of government expenditure make any sense? If not, then why not?
The conventional view
This is that public spending must be paid for through taxation, government sales of assets, or issuing government bonds – in other words, through taxes now, ‘selling off the family silver’ now, or borrowing at interest now money which will have to be repaid in the future, and presumably setting up a burden of additional taxation for future generations.
Your reaction to this conventional answer might be a “conservative” one, which is to say, austerity to keep government spending down and privatisation, in order to keep taxes low: or a “progressive one”, which is to say, tax the rich and the multinationals much more highly, because the Government needs more money from rich people so it can pay for our public services.
Both of these reactions are wrong, or at least misleading, because they are based on that conventional view of public sector finance which I mentioned above. It is a conventional view which suits many conservatives, but is also (wrongly) accepted as being valid by many progressive people. It is – and this might surprise you – a view which the majority of highly credentialed economists, including Nobel Prize winners, know to be incorrect, but which many of them justify as a mechanism for imposing some restraint on politicians. They believe that if politicians only knew the financial options which are actually available to them, they would abuse these freedoms, ‘spend like drunken sailors’, wreck the economy.
Laws of Public Finance
I don’t believe there is ever a good reason for remaining in ignorance about something this important, and I think we have other ways of restricting what politicians do than telling blatant lies to the public, so I want to share the truth with you.
To keep this as brief and as straight-forward as I can, I am not going to dwell on the current institutional practices, conventions and rules, as they are applied in 2017. Current practices are very different indeed from how things were done before 1979. All the sets of conventions and rules which have been applied down the years have, to a greater or lesser extent, obscured the truth about public finance, which I can summarise in two sentences. Let’s call them two ‘laws’ of public finance (based on Lerner’s laws of functional finance, from the 1940s).
1 A government with its own currency (like the dollar), its own central bank (like the Reserve Bank), a floating exchange rate, and no foreign currency debt, faces no financial budget constraint at all.
2 Such a government faces real and ecological constraints, but no financial constraint.
Let’s be clear what we are talking about here. We are not talking about Greece. We are not talking about an independent Scotland, if Scotland were to keep the pound or join the euro (which I have recently advised a Scottish political party to stop saying they would do). We are talking about a genuine ‘monetary sovereign’. We are talking about the USA, Japan, Australia and the UK, among many others.
The Australian Government is a monetary sovereign. Every time the Australian Government spends a dollar, it does so by crediting the reserves of a commercial bank which are held at the RBA (Australia’s central bank) by that dollar, and having the commercial bank credit the bank account of whoever has been the beneficiary of that spending. In other words, every time the Government spends, it creates money. Not some of the time – every time. All of the Governments spending creates money, and all this money is created using the equivalent of keystrokes on a computer.
The Government does not need to receive your money in taxes, or borrow your money by selling bonds, or raise money from you by selling you shares in government owned utilities …. before it spends. Think about it for a moment. It isn’t, in a literal sense, your money in the first place. Who issues the nation’s currency? The RBA. And who owns the RBA? The Australian Government. The Government doesn’t need to collect its money, which it creates, from you before it can spend.
Every time our national Government spends, it creates some of its money for the purpose. I know commercial banks create a great deal of deposits for themselves, and a great deal of what is normally defined to be ‘the money supply’ by lending to their customers, but they can only do this because they have access to Government money, in the form of their reserves at the RBA. There are two ways for this money to be created. One is the Government spending this money (permanently) into existence, and the other is the RBA lending this money (temporarily) into existence.
We have come to the answer to our initial question. How can we pay for an increase in health spending? The same way that we pay for all public spending. The Government will spend the money into existence. The way the accounting is done these days, and current institutional practices, obscure this truth, but they do not change the fact that it is a truth. It is not a theory. It is a plain fact.
Let me put it more simply. Money does not grow on trees. It is easier than that. Money comes from nowhere. It exists mainly in the form of electronic entries on spreadsheets (these days), and you can say it is typed into existence. Our Government can no more run out of dollars than the scorer at a cricket ground can run out of runs, perhaps something to remember the next time our Australian boys go over to England to win the Lords’ test match. In this sense, the Government really does have a ‘magic pudding’.
You might ask me whether I am talking about ‘printing money’ to pay for the Government’s spending. You might conjure up visions of Zimbabwe or Weimar Germany. I’ll deal with those briefly in a footnote below, but let us be clear – in a sense, all of Government’s spending always involves ‘printing money’. Except, I hate using that term, because of its associations, and because it is a little misleading. Very little modern money is actually printed, remember – it is nearly all electronic.
The Purpose of Taxation
The question is, then, why do governments tax people at all? Taxes do not ‘pay for government spending’, after all. Taxes do not pay for the education service. Taxes do not pay for Medicare. It might make you feel better to know that your taxes are not paying for military weapons. They really aren’t. The Government doesn’t need to get money from rich people before it can spend. Your taxes, in a literal sense, do not pay for anything. Taxes, at least in a monetary sovereign state, pay for nothing at all.
So, why do we pay taxes? There are many distributional, or microeconomic, functions which the tax system fulfils. However, at the macroeconomic level, the purpose of taxation is very simple. It is necessary for people to pay taxes to destroy (to use a provocative word) some private sector spending power, to make room within the economy for the government to conduct its desired spending on public goods and services, without pushing total spending in the economy beyond the productive capacity of the economy and causing inflation. Taxes limit inflation, helping us to maintain the spending power of money, so that people maintain their confidence in the value of money.
We have reached the second law I wrote down above. As a society, we cannot run out of dollars, but we can run out of people, skills, technology, infrastructure, natural and ecological resources. There are limits – but the limits are ‘real’ and not financial. When planning for the future, governments should use their freedom from financial constraints to plan wisely to manage the real and ecological constraints which will always be with us.
The Government, then, cannot spend without limit, because it would push total (private sector plus public sector) spending beyond the current capacity of the economy, and be inflationary. So we have to pay taxes.
This does not, however, mean that governments need to ‘balance the budget’, or should ever attempt to balance the budget, or limit its deficit to a specific proportion of GDP. In fact, most Governments (including Australia) have hardly ever run balanced budgets or budget surpluses in modern times, and when they occurred they tended to be just prior to economic downturns. For example, there were very small and very temporary fiscal surpluses in the UK in the late 60s, the late 80s and the late 90s. The rest of the time, the UK Government has been in continuous fiscal deficit, since the early 1950s.
This is true almost everywhere, with almost all the exceptions being relatively small and oil rich countries, like Norway. In the case of Norway, what makes it possible for the government to run fiscal surpluses is not the ‘sovereign wealth fund’ you may have heard about. It is simply Norway’s consistently large trade surplus with the rest of the world.
Most governments most of the time historically have run budget deficits. This is essential, because if the rest of us want to build up our savings in dollars (including foreigners in ‘the rest of us’) it turns out the Government will be forced, one way or another, to run a deficit. A good deficit will prevent a recession from happening, and a bad deficit would be the consequence of a recession happening and tax receipts crashing while welfare payments rise, when everyone wants to save and not spend. To explain the logic properly would mean going into too much detail here, but believe me it is a mathematical (or accounting) fact of life.
Sovereign Government Debt is Different
Doesn’t all this mean the Government getting further and further into a burdensome ‘debt’, which future generations will have to repay, so that government borrowing is somehow immoral, and especially so if it isn’t to pay for investments in the future?
Not once you understand that monetarily sovereign governments don’t and can’t really borrow in their own currencies, at all, in the conventional sense of the term. If you or I, or a business, or a local authority, borrow in dollars, then later on we will have to repay that debt and the interest on it, or we will go broke. We are (obviously) not monetary sovereigns. We face a financing constraint.
It is different for our national Government. I have already said that the Government spends new money into circulation, and then uses taxes to destroy some of that money so that there won’t be rising inflation. Ideally, the Government should spend more than it taxes, when it is running a deficit, to ensure that total spending in the economy is at the right level to maintain full employment. The total level of public spending, how it is divided up between public goods, and the structure of the taxation necessary to limit inflation, are then political issues.
Until the Global Financial Crisis, and before some central banks started doing quantitative easing, it was necessary for their governments to sell government bonds to more or less match government spending net of taxes, in order to keep control of interest rates. The reasons are a bit dull, but if you bear with me I will try to explain.
Interest rates in general depend on the interest rate banks charge each other when they lend each other money for liquidity management purposes for very short periods of time. A fiscal deficit effectively feeds cash reserves, or liquidity, into the banking system. In the past, it was necessary to remove those reserves again by selling government bonds, or this interest rate would fall below the level the central bank wanted it to be at. Banks with plenty of reserves of cash don’t need to borrow from other banks. Sales of government bonds were about keeping the supply of cash to the banking system limited to the right level to stop interest rates falling.
That’s all changed now – at least in the UK, the USA, Japan and the Eurozone. The central banks of all those countries first cut interest rates to virtually zero, after the Financial Crisis, and then used quantitative easing to deliberately flood the banks with cash reserves, by purchasing large amounts of (mainly govern-ment) bonds from the private sector. The so-called ‘bank rate’ is now not a rate of interest at which private banks lend to each other – it is now the rate of interest that central banks pay on the huge amount of reserves the commercial banks have on deposit with it. Rather than seeking to limit those reserves, the central banks have been deliberately increasing them.
Yet the old practice of each government selling its bonds goes on. It is rather ridiculous at the moment, because as the governments concerned are selling new government bonds – in a conventional view, to raise money – their own central banks (which are owned by each government, remember) are kept busy buying those same government bonds second hand from the private sector, in order to increase the amount of money in bank reserve accounts. It’s very strange and anachronistic. Economists like me view it as something of a muddle.
We have learned in recent years that there is no genuinely good reason for selling government bonds at all, if you are a monetary sovereign government. Indeed, it would be better to convert them into term deposits at the central bank, and to regard them as a form of money.
After all, at the moment bank reserves held at the central bank are (in an accounting sense) Government liabilities, on which the central bank as part of the Government pays interest, but are not seen as Government debt: government bonds are also government liabilities, on which the central bank on behalf of the Government also pays interest, but they are seen as Government debt.
Moreover, if the central bank, as a part of QE, buys Government bonds from the private sector, it is just swapping one interest bearing government liability for another. No wonder QE doesn’t work! It isn’t ‘free money’ at all. It is basically swapping two very similar assets for each other. The private sector used to own Government bonds and receive interest. The private sector now owns reserves at the central bank, and still received interest.
Why would that arrangement act as much of a ‘stimulus’ for the economy? Why, indeed? To cut a very long story quite short:
1 When the Government spends it creates money.
2 When the Government taxes it destroys money.
3 Government ‘debt’ should not be thought of as ‘debt’ in the conventional sense at all. It is better thought of as a form of money.
4 The Government cannot run out of money, and as long as it doesn’t guarantee to convert its money at a fixed rate into anything it could run out of, it faces no financial constraints at all.
5 However it faces real and ecological constraints, because we can run out of people, skills, technology, equipment, infrastructure, natural resources, and ecological space.
6 The Government is NOT a household and NOT a business, and has nothing at all in common with a household or a business, where financial matters are concerned.
7 When progressives understand this and start framing their arguments in this light, I believe they will be able to argue their points far more effectively and persuasively, and free themselves from what are sometimes called ‘neoliberal dogmas’ (i.e. conservative and ‘new labour’ nonsense).
Understand all of this, and I think that it will change your perspective on many things. And ought to make you a great deal more confident when dealing with interviewers. If they approach you using the conventional view as a framework, remember that it is either because they have never really thought these issues through or because they are being dishonest for some reason (sometimes it is a mix of the two, and people can, of course, be dishonest with themselves, or at least suffer from cognitive dissonance).
Footnote: Mugabe’s Zimbabwe and Weimar Germany
Zimbabwe 2008 If you engage in a poorly planned and violent land reform, regardless of your motivation, there will be consequences. Zimbabwe’s govern-ment managed to wipe out its vital agri-cultural system, while at the same time alienating most high income country governments, and facing sanctions. The supply of food failed. The Government then (literally) printed vast amounts of money to buy non-existent food, and inevitably the price level sky-rocketed. Ever higher prices then led to ever more money being printed, so that at least the friends of the government and the army could be provided for. The result was hyperinflation. The lesson is that if you destroy the supply side of your economy and try to make up for it by printing loads of money, you will be able to create hyperinflation. Zimbabwe 2008 has no lessons for Australia 2016.
Germany 1923 Germany’s productive capacity had been destroyed by war and by the resolution of that war. In addition, Germany had been required to pay vast amounts of gold to its former enemies. The only way to obtain the gold was to buy it, using marks which could then only be spent into a German economy already on the brink of famine. There were some other issues, but it’s basically similar to Zimbabwe 2008. If you destroy the supply side of an economy and then print loads of money, you will push spending far beyond the productive capacity of the economy and create inflation.
The Bank of England is actually finding it difficult to persuade investors to sell it sufficient government bonds to facilitate its planned bank reserve for government bond swap (sometimes called ‘quantitative easing’).
There is a problem with a lack of spending – not just in the UK, but throughout the high income economies, to a greater or lesser extent.
Yields (interest rates) on government securities are negative in some countries, and at record lows in others, such as the UK.
And yet governments still refuse to do what we know works, which is to SPEND more.
They are obsessed with the government as household myth.
And so central banks have to keep doing these desperate and ineffective monetary operations.
Everybody knows they don’t work. Central bankers know they don’t work. Only politicians and some of their more obstinate, head in the sand advisers, haven’t understood this by now.
And so we have more of the same, as they desperately try to convince a still over-indebted private sector to take on even more debt, and kick the problem further down the road.
This is a problem which is actually bigger in Australia than in the UK, and is nothing to do with Brexit, but of more immediate (and possibly medium term) significance than Brexit.
It doesn’t help that there is still at best a grudging and slight interest in these issues in the media.
Nobody is prepared to say that governments should be spending and investing more, and that there is no need to in the normal sense of the term ‘borrow’ to do so.
I recommend, as do many, a voluntary and equitable job guarantee scheme to eliminate involuntary unemployment, assist in regulating effective demand and inflationary pressure, and stabilise an unstable economy.
Right now, though, we also need more government investment.
Forget QE! It isn’t what people often describe it to be (‘free money’) and it doesn’t achieve anything worthwhile, even when performed on a record scale.
Outright monetary financing of government investment spending, done on a sufficient scale, would deliver.
Meanwhile, if you want a quick fix, just put some money into everyone’s bank accounts.
Easy to do.
And yes, UK Conservatives and Australian Liberals, you very definitely could afford to do it.
It might even make you popular, and right now would not be inflationary.
A New Zealand colleague recently drew my attention to the NZ Royal Commission into Monetary, Banking and Credit Systems (1956) , and in particular to clause 157:
” 157. The volume of money (on the Reserve Bank definition) is increased:
(a) When a customer of the Reserve Bank or a trading bank lodges, to the credit of his account, foreign exchange received from the sale of goods or services beyond New Zealand, from gifts or legacies from persons overseas, or from the proceeds of a loan raised with an overseas lender.
(b) When the Reserve Bank or a trading bank buys securities or other assets from an individual or firm and the proceeds are lodged to the credit of the seller’s account at a bank.
(c) When the Reserve Bank makes a loan to the Government or to marketing authorities. At first, the borrower’s deposits at the Reserve Bank are increased, and when this money is spent, the recipients may lodge part of it in their accounts at the trading banks and retain part of it in circulation in the form of notes and coin.
(d) When the customer of a trading bank draws on an overdraft limit granted by the bank and the recipient of his cheque lodges it to the credit of his account at a bank. ”
Clause 157 remains valid for modern world economies, however it does not discuss the dynamic nature of the money supply. In particular, bank credit money is temporarily reduced from the money supply M1 whenever a non-bank makes a payment to a bank (including a loan payment, of principal or interest), and bank credit money is temporarily added to M1 whenever a bank spends into the real economy or purchases a financial asset from a non-bank.
In addition to the four modes of money increase listed above, M1 temporarily increases whenever a bank spends or buys assets from non-banks, and when the central government spends into the real economy. And M1 is reduced temporarily when a central government receives tax receipts from non-banks and when it borrows from non-banks.
Moreover, we need to consider deficit spending by a sovereign government, which spending is directly associated with increases in liquid funds available to the private sector, and in particular to non-banks. It will be recalled that liquidity is defined as the conjunction of accessible money and financial assets which are readily convertible into accessible money. Much of the liquidity held by the private sector takes the form of risk-free financial assets, embracing both short-term and long-term Treasury securities. An increase in liquidity has profound economic consequences, contributing to aggregate demand, private sector income and savings, and employment.
So we have a complicated dynamical picture of money and liquidity being created and destroyed, the full import of which may be assessed by setting up a dynamic model of the entire economy, including most importantly the financial and banking sector. Prof Steve Keen’s models attempt to do this, in marked contrast with the economic modelling of mainstream economists.
Has everyone forgotten the role played by the ratings agencies in the global financial crisis? Have any of those responsible for the wrongdoing of those agencies been punished for their destructive activities? Absolutely not! They have been protected from prosecution for their crimes. The ratings agencies in question have no useful or constructive role to play in the world and should, at the very least, be closed down.
The very idea that a monetarily sovereign government (meaning one that issues its own independent currency and has a floating currency exchange rate) is at risk of default on the securities issued by its Treasury is quite absurd. The contrary examples that are provided by those who do not understand this reality are always of governments that are not monetary sovereigns.
An interview on 26 October by BBC economics editor Robert Peston with former Fed chairman Ben Bernanke  has revealed that the latter thinks there should have been a stronger fiscal response to the global financial crisis in most countries, rather than their obsession with budget cuts, which left central banks with the primary responsibility of trying to pick up the pieces and keep their economies functioning — despite the moral hazard attached to bailing out the banks with public money.
As chairman of the U.S. Fed during the crash and its aftermath, Bernanke is the most influential central banker of our age, and so his opinions on economic policy should be taken seriously.
What was not discussed in this brief interview was the alternative — which would be anathema to most main-stream economists — of allowing the failed U.S. banks to go to the wall with their shareholders wiped out, and nationalising those banks with the application of government guarantees for all existing bank liabilities and assets.
The money directed to recapitalizing the newly nationalised banks could be repaid to the central government Treasury over time from the banks’ profits, after which time some consideration could be given to re-privatising them.
The response of governments, and especially the U.S. government, to the next financial crisis will demonstrate whether any lessons have been learnt. We might not have much longer to wait, in order to find out.
1. Source: http://www.bbc.com/news/business-34641850