Gordon Brown has warned that the world could “sleepwalk” into a financial crisis as big as the one that hit in 2008.
The former prime minister insisted dangers had increased because the world is now “leaderless”.
His comments came during an interview with the Guardian, in which he was asked about the risks of another economic collapse.
“There is going to have to be a severe awakening to the escalation of risks, but we are in a leaderless world,” he told the paper, adding that the international coordination shown in the wake of the 2008 crisis would be impossible now.
He said: “The cooperation that was seen in 2008 would not be possible in a post-2018 crisis both in terms of central banks and governments working together.”
This week marks the 10 year anniversary of the collapse of investment bank, Lehman Brothers, who were declared bankrupt while holding $639 billion in assets and with $619bn in debt. This remains the largest bankruptcy filing in history.
Brown was prime minister during the onset of the 2008 financial crisis, which helped destroy his premiership in the 2010 general election, and pointed out that when the previous crisis occurred, international cooperation was vital in the months that followed.
Claiming countries “have retreated into nationalist silos” and are “at war with each other” on issues such as trade and climate change, he argued: “In the next crisis, a breakdown of trust in the financial sector would be mirrored by breakdown in trust between governments.”
“There wouldn’t be the same willingness to cooperate but rather a tendency to blame each other for what’s gone wrong.”
The former prime minister also singled out Donald Trump as someone who could stand in the way, stating that the president’s “protectionism” is the “biggest barrier to building international cooperation”.