Failure Of Collective Imagination Of Bright People

Britain`s Queen Elizabeth II received an interesting letter from esteemed economists, explaining what caused the credit crunch.

British Queen Elizabeth II received an interesting letter in June this year, signed by a group of recognised and famous economists, in an attempts to reply to her question “how did financial wizards failed to foresee the timing, extent and severity” of the economic crisis, Telegraph writes.

The three-page letter is signed by professor Tim Besley of the London School of Economics, an anonymous external member of the Bank of England`s monetary policy committee and politics historian Peter Hennessy, inspired to answer the Queen`s questions as to why nobody had predicted the credit crunch.

The lads wrote about the “psychology of denial”, which has reached the elite of the political and economic world, and bluntly said that financial experts convinced themselves they found a way of spread risk across the global market – which is an excellent example of “wishful thinking combined with hubris”.

- In summary, your majesty, the failure to foresee the timing, extent and severity of the crisis and to head it off, while it had many causes, was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole - the letter to the Queen concludes.