A year after Lehman Brothers collapsed, Wall Street is heading back to normal. However, concern about another financial crisis still remains as reckless behavior and systemic risk are still at large.
"The big thing is confidence. This day last year, people were running around. We were selling everything. There was no confidence in the market, " Alan Valdes, a veteran trader at Hilliard Lyons, told Xinhua in the New York Stock Exchange.
"The credit market was frozen up. Bear Stearns had already gone under and tomorrow AIG would go under. It was a total chaos that day. Mostly any market on any given day is all about confidence and there was no confidence back then," he recalled.
To counter the most severe financial crisis since the Great Depression, the Bush and Obama administrations launched enormous economic stimulus plans to free up the frozen liquidity, which was caused by the worst financial crisis since the Great Depression.
Partly because of these aggressive efforts, there are signs that the economy has stabilized. As confidence comes back in the market, the stock market has been up over 55 percent in the S&P since March. The Dow Jones average hit 9,700 for the first time since Oct. 6 on Tuesday. But most economists believe full recovery of the financial system will take a great deal more time and work.
After the Fed made a massive money flow into the market, some economists warned that it might face a tricky balancing act ahead: how to make sure an economic recovery gains needed momentum, while guarding against inflation or another bubble-induced crisis.
On Monday, U.S. President Barak Obama iterated his financial regulation reform plan on the anniversary of the Lehman fall. One of key points of this plan is to create clear accountability and responsibility for regulating large financial firms that pose a systemic risk. But some economists doubt if the reform could effective enough to curb risks.
In a recent interview, Nobel laureate economist Joseph Stiglitz voiced his concern over the financial institutions, saying that they were "too big to fail" and "too big to be managed."
He said one of the real lessons to learn from Lehman Brothers' bankruptcy was that banks should never be allowed to grow so big and so intertwined that their failure would cause a crisis.
The fall of Lehman was a "consequence" rather than a "cause" of the global economic crisis, he said. "It was the consequence of flawed lending practices and inadequate oversight by regulators, including the Federal Reserve."
There is a saying in Wall Street: "People can not make big money without doing bad things." Just like what Obama mentioned inhis speech to Wall Street, some in the financial industry are back on old track again. Instead of learning the lessons of the crisis, they are choosing to ignore them.
Will Obama's so-called "the most ambitious overhaul of the financial system since the Great Depression" change Wall Street? People have to look into every detail in coming years.