LeGrain details the key facets of the credit crunch, the mistakes big bank banks made and what the policies are needed so that the same mistakes are not repeated which could create an even worse crisis. The arguments are straight forward and difficult to disagree with. Banks can never be considered too big to fail; structured wind downs should be favoured instead of endless bailouts; and chief decisions makers in banks must be held accountable.
This book also contains a reflection on the global economy looking into the future. This centres around the evolution of the big emerging economies (Brazil, India, China), global issues (not only financial systems but other concerns such as climate change) and how esablished Western economies should act in a new world which doesn't de facto guarentee their hegemoney. He makes several simple but pertinent points. For example, Britan once built its empire around - amongst other things - Indian Tea. But, now it is an Indian company Tata tea Tea which has acquired Tetley Tea - the principle British tea company. The internet revolution may have begun in America but even a quick look at the big players: Google, Yahoo, eBay, YouTube, PayPal shows they were co-founded by people born outside the US. But, even though immigration can nurture innovation it can also nurture protectionism. LeGrain details cases where Australia was skeptical about Chinese interests in its natural resources. In some cases this protectionism may be justified by skepticism of the lack of democracy in China; in other cases it might just be xenophobia getting the better of people - it's not always so easy to say.
But either way, the point here is that we are now unequivocally globally interconnected. One only needs to look at the US dollar reserves China has (estimated to be 2 trillion $).
'Aftershock' clearly contains plenty of interesting points, so what are the short comings? Well my principle criticism of this book is that it lacks direction. Admist a whistle stop tour of global economic facts, I was wondering what the overall central thesis was or if there was even meant to be one? Some of the facts at the end of the book could have been put at the middle or the beginning and it wouldn't have made much difference.
My second criticism would be that perhaps LeGrain is trying to cover too much. This meant some areas had a shortage of substance. For example, even though he mentions some interesting facts about photovolvic cells and the very interesting story about Justin Rowlatt (the eco warrior who turned his life upside down in an effort to reduce carbon footprint) is interesting, I couldn't just help thinking his analysis of climate change (which is such a complex issue) was a bit simplistic.
My third and final criticism is even though there's plenty of interesting material, I felt key parts of the jigsaw were still missing. For example, when detailing the crisis in Iceland he mentions interesting facts such as their interest rates rocketing to 18%. But, I didn't end up with a deep understanding of the causality here. Why didn't it go to 20%? or 15%? Similarly, even though the book aims to be analysis of global finances and there are several points about the IMF and World Bank, I felt there could have been a bit more about these institutions as their power and importance can't be underestimated. He does do a very good job of explaining economic principles such as leveraging (and its associated risks) but I think the reader would have greatly benefited if there were clear, detailed explanations of exactly how the IMF and world bank operate.