BY ANTONY CURRIE

The 10th anniversary of the financial crisis could not come at a better time. Tuesday marks a decade to the day since HSBC fessed up to its subprime-mortgage problems, which were growing so rapidly it needed to set aside an extra $1.8 billion to cover losses. A day later New Century, one of the country’s biggest stand-alone home-loan providers at the time, admitted it would need to restate its 2006 results. Thus started a credit crunch-turned-global recession that cost the U.S. economy alone as much as $30 trillion.

That figure, an upper estimate from the Dallas Federal Reserve in 2013, should serve as a sanity check as the Trump administration, the Republican Party and banks crow about the chances of regulatory rollback. It’s a timely reminder that exuberance and loose standards can cause painful damage.

Doubtless some of the regulatory zeal in the aftermath of the worst financial crisis in generations needs toning down. Smaller banks, for example, have been hit unduly hard by new rules. The pre-2007 excesses, though, needed to be dealt with – from overly lax lending to conflicted credit ratings to skewed compensation incentives.

Those took root in the system after bankers chafing at the bit about older regulatory restraints like Glass-Steagall persuaded Congress and watchdogs to overturn them. Bankers then downplayed the risks and overemphasized the upside. So Wall Street executives in 2007 asserted subprime mortgages would wreak no havoc as they represented just a couple of percentage points of revenue. Within weeks, they were forced to admit they paid no attention to how great the losses could become.

A similar blinkered approach is starting to return as bankers, as well as investors in all sectors, concentrate on the benefits of Trump administration promises on tax cuts and regulatory reform. Meanwhile, they’re ignoring the potential impact of the president’s trade protectionism and broader America First policies.

The impact of the last decade’s financial crisis is long-lasting. It caused GDP losses that compounded each year from 2008 to 2015 and decreased business fixed investment by a fifth, according to a new analysis by Wells Fargo economists. The likes of Citi and BofA are still trying to offload unwanted pre-crash assets even though the Fed’s exceptionally accommodative monetary policy has boosted asset prices.

The U.S. economy may be growing slower than current pushers of deregulation would like. But it hasn’t lurched into its usual pattern of a recession every six or seven years. That should count as a victory worth remembering.

First published Feb. 7, 2017

(Image: REUTERS/Bobby Yip)