Editorial: Amidst all the economic challenges, now there is a banking scare - 15 years after the 2008 financial crisis

The term referred to lending money in America to people with poor credit ratings to buy a house, a practice which helped trigger a global financial crash.

This led, among other things, to the collapse of the US investment bank Bear Stearns, the 15th anniversary of the demise of which was yesterday.

In fact there had been a foreshadow of the crisis months earlier in Britain, in late 2007, with a run on the Northern Rock.

The world economy has never been right since. In countries such as the UK, absurdly low interest rates of in or around zero have helped to sustain an illusion of normality, as have financial responses such as printing money. Now, in America, there has been another drama. The failure of Silicon Valley Bank. The banking system, in other words, is still not fixed.

This latest crisis is not getting much attention on this side of the Atlantic. It seems distant to most people. We can only hope that it stays distant.

The UK economy is already fragile due to Covid. It had been edging its way out of ultra low interest rates, which have created a raft of injustices such as causing asset prices to soar, thus benefiting the 'haves', who already own valuable assets, and widening the inequality gap with the 'have nots', who don't have assets.

Crazily low interest rates has punished savers, who for many years have not seen their lump sums keep pace with inflation. A gradual rise in UK interest rates over the last year had seemed to presage a welcome return to more normal economic conditions. The new financial problems threaten that.

Wall Street shares were calmer yesterday after a turbulent Monday. Let’s hope that means the latest banking scare will be contained.