, Columnist
The Next Crisis Will Start in Silicon Valley
Forget Wall Street. Worry about fintech.
Dangerous neighborhood?
Photographer: Jason Alden/BloombergThis article is for subscribers only.
It has been 10 years since the last financial crisis, and some have already started to predict that the next one is near. But when it comes, it will likely have its roots in Silicon Valley, not Wall Street.
The world of finance looks very different today than it did 10 years ago. In 2007, our biggest concern was “too big to fail.” Wall Street banks had grown to such staggering sizes, and had become so central to the health of the financial system, that no rational government could ever let them fail. Aware of their protected status, banks made excessively risky bets on housing markets and invented ever more complicated derivatives. The result was the worst financial crisis since the Great Depression.