12 months on and the financial system isn't fixed, warns Stiglitz

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By Telegraph Staff

Mr Stiglitz, who is former chief economist at the World Bank, told Bloomberg News that "in the US and many other countries, the too-big-to-fail banks have become even bigger.

"The problems are worse than they were in 2007 before the crisis."

Mr Stiglitz joins the growing debate about how best to avoid a repeat of the worst financial crisis in decades without choking off growth in the financial services industry. His view has been echoed by former Federal Reserve chairman Paul Volcker, who has advised President Obama’s administration to curb the size of the banks.

A year on from the demise of Lehman and the month of severe financial stress it triggered, there is little consensus among governments on how to reform the system. French President Nicolas Sarkozy has been most aggressive in his plans to target bankers' pay, but has failed to win the backing of the US.

12 months on and the financial system isn't fixed, warns Stiglitz