For all the caveats, the risk of financial meltdown can’t be ignored. Indeed, we need ask ourselves why events like the collapse of Lehman Brothers caused such chaos and what can be done to prevent future events from triggering system-wide panic.

Andrew Haldane, of the Bank of England’s Financial Stability Committee, sets out some of the answers in a brilliantly insightful speech. He begins by highlighting the commercial importance of language:

  • “A common language has been found to increase dramatically bilateral trade between countries, by more than 40%. It has been found to increase bilateral investment between two countries by a factor of three or more.”

If everyday communication can make such a difference, then what about the highly technical information systems used for specialised purposes like finance?

Haldane argues that the financial sector is a latter day Tower of Babel, with rival information systems impeding communication within and between institutions:

  • “The economic costs of this linguistic diversity were brutally exposed by the financial crisis… The whole credit chain was immersed in fog. These information failures contributed importantly to failures in, and seizures of, many of the world’s core financial markets…”

And yet there is hope that things will change. Other global industrial networks have already moved to common information systems. The internet is the most obvious example, but Haldane focuses on another: product supply chains.

  • “Before barcodes, suppliers, manufacturers and retailers recorded their products in bespoke languages. This was a recipe for inefficiency, as goods were recorded and re-recorded in different tongues. It was also a recipe for confusion as there was no simple means of understanding and communicating along the supply chain.”

A standard information system has transformed the sector: supply chains have lengthened, barriers to market entry have been lowered and waste has been reduced. Most importantly, the impact of disruptive events (such as product recalls) can be minimised.

Haldane reports that something similar is beginning to happen in finance. Standard ways of describing products and players are slowly coming together. This, one assumes, is good news – but what took them so long?