The fear that dares to speak its name

On October 7 in Florence, the plumbers of the world’s financial markets will attempt heroically to put aside their differences and cooperate. In theory they are all trying to avert the same disaster. In practice, for the last few years, they have been pulling in different directions and pursuing at least five different solutions.

The disaster is Herstatt risk, something the world has come close to only once, in 1974, when Bankhaus Herstatt in Cologne was shut down by the German banking supervisors.