The 1980s witnessed the collapse of the investment firm DREXELL BURNHAM LAMBERT and the imprisonment of Michael Milken and Ivan Boeskey for insider trading. This was an era of leveraged buyouts financed by junk bonds, which demonstrated the greed and arrogance of wall-street personnel. The 1990s saw the dot com boom and bust. The stock market fell after 911 and then recovered before the decline occasioned by the 2008 financial meltdown. However, before the 2008 crisis we witnessed the collapse of MCIWORLDCOM and ENRON the imprisonment of Bernie Ebbers and some of the Enron executives for fraud. Ebbers is serving 25 years.
These international events were caused by a number of factors, such as, the greed and arrogance of wall-street actors; the greed and ignorance on the part of some investors and in some cases, an absence of effective regulation and the political belief in the virtues of the market to be self-regulating. ALAN GREENSPAN now admits that he made an error in assuming that the market would effectively regulate itself to prevent excesses.
The Caribbean over a similar period of time has witnessed financial crises. In Barbados the year 1986 saw the collapse of Trade Confirmers, a finance company offering interest rates on deposits that were in excess of what the other regulated entities were offering. The depositors lost their money. However, prior to that event, Barbadian depositors had lost money when two icons on the Barbadian business landscape the COTTON FACTORY and THE BARBADOS FOUNDRY collapsed. Here again there was no bailout of depositors. Trade Confirmers though a deposit taking institution was not regulated by the Central Bank and this brought about a change of legislation subsequent to the event to regulate these Finance Companies. However, there are still companies in Barbados accepting deposits from the public which are not licensed as banks or other deposit taking institutions. This has come to my knowledge recently.