Why no one seemed to see the crisis coming

  • by

Not long after the Queen’s famous question about the financial crisis, Tan Suee Chieh wrote an article for Singapore’s Straits Times on 29 June 2009.

This is of great relevance as Mark Carney, in his second Reith lecture, raised the issue of why these growing vulnerabilities were missed.

Suee Chieh, who has great interest in psychology, group think and systems thinking offered an expanded explanation. What drives people to think and act as they do?

The article look back at episodes of great significance, why clearly problematic symptoms seen with foresight were allowed to persist. It was not true that nobody had seen a crisis building, its triggers and amplifiers. What could have been different in the system for those voices to have been listened to?

We ignore or discount the future, we do not like to think about our individual behaviour becoming deleterious group behaviour, and our mix of myopia, optimism and group pressure make it harder to see the consequences of our actions or our failure to act. The more uncertain the future, the more reluctant to look ahead we tend be, seeking safety in group think and the status quo. If the status quo suits the herd, it is hard to listen to contrary views and even harder to take action.