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15 September 2018updated 09 Sep 2021 5:51pm

The specific moment in 2008 that the public realised there was a financial crisis

It took some longer than others. 

By Olivia Joyner

The collapse of Lehman Brothers on 15 September 2008 signalled the start of the financial crisis. Ten years on, YouGov ran some focus groups to explore people’s views of it. We found that many still place responsibility for the crisis on both government and the financial institutions, but they aren’t particularly concerned about it happening again, as they don’t think they have enough to lose. Despite the anti-banker rhetoric that has emerged since the crisis, most still think banks provide an essential service.

The 2008 crisis

A news story, a surprise redundancy, a friend in trouble. These are all ways that people first noticed something was wrong in 2008 and these experiences are mirrored across all age groups and backgrounds. Lehman Brothers’ collapse was when a lot of older respondents say they knew something was wrong.

“They told us the company had gone into administration and it had something to do with loans and not being able to stay open”, was how one 28-year-old female respondent from Yorkshire and the Humber put it.

However, the moment many others became concerned was when it affected them personally. For a public sector worker, it was when her wages were frozen. A private sector employee recalled it was when the whole company shut down because of “something about loans”. For a then-university student, the impact came a little later – when he struggled to find work after graduating. Many spoke of how much harder it was to get mortgages. “Loads of people I knew almost lost their homes”, one said.

“The irony was that as soon as the crash affected my business was when I needed banks the most – which was precisely when they were the least help”, a 51-year-old man from the West Midlands said.

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Whose fault was it?

Younger respondents mostly blame the crisis on governments’ failure to regulate banks, while older respondents tend to blame the banks themselves. No one blamed bank employees, who most thought “were doing what they were told”. Instead, participants blamed the heads of banks, board members, and simply the “system” or the “culture”.

Few felt anyone – be it the government or the banks – has been properly penalised or punished for their actions. Indeed the general consensus is that banks got away with a few changes, a “slap on the wrist”.  Participants were fairly confident some measures had been enacted since the crisis to make the financial sector more secure, but no-one can name any.

“Supposedly regulations [have come in], but do any of us really know what they are and what they mean?”, asked a 61-year-old man from Yorkshire and Humber.

The aftermath of the crisis

People still think the impact of the crisis is being felt. They see ongoing issues with debt and wages as evidence that 2008 continues to cast a shadow over the economy. Many also believe the financial sector is still in a pretty fragile state. While one participant stated that “one rogue trade and it could happen [again] overnight”, many younger respondents felt Brexit could cause another crisis, because of uncertainty about how the financial sector will be regulated when Britain leaves the EU.

Nearly all participants wanted to see more accountability, transparency, and responsibility in the financial sector, though few were aware of changes already made and their impact. Some mentioned that bankers should earn less.

Older respondents were more likely to say they would like to see smaller, more community-based banks emerge. Younger participants in particular were more aware of the Financial Services Compensation Scheme, where UK-regulated current or savings accounts and cash ISAs are covered for up to £85,000 in the event of a bank collapse. A few also said that they thought levels of customer service have improved in the past decade as a result of the crisis.

Generally, though, participants didn’t seem hugely worried about the effect another crisis would have on them, largely because they did not think they had enough money to be concerned about.

“My money in banks is below the protected limit so even if they use it irresponsibly it should still be safe,” a 30-year-old man from the south east said.

What people think when they hear the word “bank”

Despite their views on the crash, its causes, and its impact, people in our groups took a more nuanced view when it comes to the banks themselves.

“Money” and “profit” are the most common words participants associate with banks. While many link these to more negative descriptors such as “money for themselves” and “bosses can’t lose”, the next most common term is “needed” or “necessary”. This is in line with our other research  that shows “essential” is the most common word people use to describe banks.

“I don’t trust them, but I need a bank account to survive. I would change my bank if I thought there was a difference between them”, a 40-year-old woman from the west midlands said.

Olivia Joyner is the Associate Director of Qualitative Research at YouGov. 

YouGov conducted two online focus groups to discuss people’s views of the 2008 financial crisis in greater depth than is possible via quantitative surveys. The groups were split by age – one featured people aged 28-40 and the second with people aged 41-71. Both contained of a mix of genders, ethnicities, social grades, regions, working status, incomes, financial stability and knowledge about the financial crisis. All respondents were financial decision makers within their households.

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