The project’s central hypothesis was that remembering financial crises improves the functioning of financial markets, by drawing lessons in order to optimise the balance between caution and risk-taking in financial transactions, and between conservatism and innovation in the shaping of the financial architecture. Research was primarily concerned with financial crises taking place in the United States, Britain, France and Germany –the world’s largest economies for most of the twentieth century.
The project concentrated on three moments in the history of financial crises:
1. The long-term memory of the financial crises of the Great Depression;
2. The medium-term memory of the crises between 1973 and 1987;
3. The short-term memory of the Financial Debacle of 2008.
Collective Memory and Public Opinion: the Press
Press coverage plays an important part in capturing the collective memory of the general public. Sixteen papers – dailies and weeklies – have been selected for Germany, France, the UK and US.
An important question was how collective memory had changed over time with respect to issues such as the depiction of the crisis, its causes and consequences, its severity, those responsible for it, and the lessons that could be drawn from it. Special attention was paid during the first part of the research to press coverage at crucial anniversaries (ten, twenty-five, even fifty years for the financial crises of the Great Depression), as well as at the time of the outbreak of a financial crisis, when comparisons were made with former crises – that of 1929 remaining the yardstick by which all other downturns were measured since then.
Number of newspaper articles referring to 1929, 1931 or 1933 during later crises
The Memory of Financial Elites
The second area of investigation focused on financial elites, a core group for the study of the memory of financial crises, alongside regulators and decisions-makers in the field of financial affairs. Some of the questions concerned the individual memory of the leading protagonists and its possible impact on financial institutions and markets, as well as the change of leadership within the financial world, and the transmission of memory from one generation to another. One of the objectives of this project was to assess the degree of persistence of memory within financial firms.
Individual memories were collected through oral history and a systematic programme of interviews was carried out within the framework of the project.
The Role of Memory for Policy and Regulation
The third area of investigation concerned policy and regulation. Monetary and fiscal policy – whether to reflate or to deflate after a crisis– reflected the perception of this crisis by politicians. The same applied to regulatory measures: how to stabilise the financial markets and prevent the return of financial crises, but also how to keep them afloat, or even to stimulate them. This raised the question of financial innovation: to what extent have the possibly destabilising effects of new financial practices and products been related to previous experiences?