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Some eminent British economists have apologized to Queen Elizabeth II, in writing, for failing to predict the timing, extent and severity of the financial crisis that has hit the country and the world, blaming it on "a failure of the collective imagination of many bright people," reports say.
After an eight-month wait, the British monarch was given the answer to the question--why nobody predicted the "awful" economic crisis--she posed on a visit to the London School of Economics (LSE) last November, reports say.
"Why did nobody notice?" the Queen asked Professor Luis Garicano, Director of Research at the Department of Management, LSE.
The "leading" British economists have finally written to her, explaining in layman's language, how the crash occurred, and why nobody saw it coming.
Blaming the economic crisis on a "failure of the collective imagination of many bright persons," they explained that the "feel-good factor" induced by the economic boom of the 'nineties lulled some of the brightest "financial wizards" into ignoring the crisis that was lurking just under the surface.
The letter, signed by, among others, LSE Professor Tim Besley who is also a member of the Bank of England's monetary policy committee, and Peter Hennessy, eminent historian of the U.K. government, suggests that it was an accident waiting to happen, but a "psychology of denial" that had overtaken the financial and political world in the run-up to the crisis prevented bankers and their political masters from seeing it.
A leading British daily, in a front-page report with the headline "This is how we let the credit crunch happen, Ma'am. " above a picture of the Queen, said the three-page missive explained how the bankers, despite these glaring imbalances in savings and debt, convinced themselves and the world's politicians that they had found intelligent ways to spread risks throughout the financial markets--whereas "it is difficult to recall a greater example of wishful thinking combined with hubris."
Apologizing for failing to predict the crisis, the economists said: "In summary, Your Majesty,.the failure to foresee the timing, extent and severity of the crisis and to head it off, while it had many causes, was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole."
Though Buckingham Palace did not comment on the letter, it said, the Queen always displayed a keen interest in current issues and was kept abreast of current issues, including recession.
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