This weekend marked 10 years since US investment bank Lehman Brothers went into administration, triggering shockwaves and a financial crisis that lasted the best part of a decade. What have we learned since then and have we succeeded in making the global financial system less risky? Or have we just swept the biggest risks under the carpet?

The anniversary has been well and truly noted in the financial press, with different perspectives on what progress has been made in rebuilding a safer, more stable financial system, with analysts providing their best guesses as to the next probable financial upheaval. The Bank of England published this useful overview of what happened that fateful 15th September 10 years ago, highlighting the key financial failures throughout the initial crisis period and some of the actions that were taken to clear up afterwards.

While the Bank of England is confident that the global financial system is safer and more resilient than before 2008, it's not complacent. It states: “But one thing is certain: the next crisis will not look like the last one. New risks to financial stability have appeared in the last ten years, and will continue to emerge.”

Hack attack risk

Paul Mee and Til Schuermann, both partners at consultancy firm Oliver Wyman, think that the digital, online, connected nature of the financial system of 2018 is one of the system's greatest potential weaknesses. In Harvard Business Review they write that the more likely culprit for the next financial shock is: “a cyber attack that causes disruptions to financial services capabilities, especially payments systems, around the world.”

A report by the firm found that cyber attacks are the biggest threat facing businesses today, ahead of terrorism, asset bubbles, and other risks and the total cost of cybercrime to governments globally exceeded $1 trillion lat year – more than triple the cost of natural disasters. The Oliver Wyman authors say that a rogue nation or terrorist group could launch a damaging attack on financial institutions or major infrastructure, although a lone-wolf attack by an activist hacker using malware could also cause widespread financial damage. The solution, say Mee and Schuermann, is for organisations to implement protection from cyber attack contagion and to ensure their operations can continue despite such an event. They add: “The financial services industry needs to fully agree on, and be prepared to practice, coordinated response and recovery strategies to prevent systemic breakdowns. Regulators in many nations have been working diligently to prepare for and curtail cyber attacks, but they need to look beyond their own borders and introduce regulations, laws, and cooperative frameworks in unison, like the European Union’s Network and Information Security Directive, which is designed to protect an ever-growing list of critical infrastructure from banking and healthcare systems to online marketplaces and cloud services.”

Huge rise in global debt

Not everyone is as optimistic as the Bank of England that the global financial system is safer and more resilient than before. Klaus Schwab, founder of the World Economic Forum (WEF) told CNBC last week that we have not achieved “meaningful change” since the collapse of Lehman Brothers. He said: "Unfortunately, I have to say that we haven't learned too much.”

Mr Schwab pointed to the high rate of global debt-to-GDP ratio today and said that we are leaving much of the problem for future generations. “We have learned how we avoid a major global breakdown, and I think all credit has to go to the cooperation of central banks. But we have postponed to a certain extent the problem or we have found a way where we give the whole mess which we have created to the next generation to solve. We should not forget that the global debt today is substantially higher than it (was) at the beginning of the financial crisis.”

The Institute of International Finance's July 2018 debt monitor puts global debt owed by governments, organisations and households worldwide at $247 trillion or 318 per cent of GDP. It's a figure that is growing and rose by more than $8 trillion in Q1 2018 alone.

The IMF has also warned about this astronomical level of global debt, which has increased by 40 per cent since 2007, and has said repeatedly that there is no room for complacency as central banks continue to build greater resilience and better security in the global financial system.