The financial crisis will be harder to end than the Great Depression and may force banks to be nationalized, “Black Swan” author Nassim Nicholas Taleb said. A more complex financial system makes the current problems, which cut global stock market value by 55% to US$28T since October 2007, worse than the contraction in the 1930s, Taleb said in a Bloomberg Television interview today.
Bonuses paid on Wall Street encouraged risk taking with no regard for losses, he added. Rare and unforeseen events are known as “Black Swans,” after Taleb’s 2007 book, “The Black Swan: The Impact of the Highly Improbable.” The financial crisis isn’t one, he said. “The “black swan” for me would be for us to emerge out of this unscathed and return to normalcy,” Taleb said.
Compared with the Great Depression, this crisis is “very different, and it requires much more drastic action.” Taleb’s book was published in May 2007, about three months before the credit crunch led banks to announce write downs and credit losses that now total more than US$1T
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