After the Lehman Brothers went bankrupt in September 2008, following which the global financial crisis worsened, Harvard University professor Kenneth Rogoff on Wednesday expects the third leg of crisis to unfold in the emerging markets.

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Kenneth Rogoff says bad financial crisis result in deep political divisions

Rogoff said, “U.S. is actually growing very well. Crisis in Europe is still fading and they haven't completely resolved the problems in the banking system.”

The former IMF chief economist said that he liked to see at least one bank other than Lehman Brothers put into accelerated bankruptcy, nationalised and quickly privatised as part of sending a very strong signal to bankers.

On populism Rogoff said, “It’s a well-established imperial regularity that after you have a bad financial crisis, you get much more division in the political system, that is something that has happened in the past and I think we are seeing it again.”

“In U.S., the economy really is growing pretty well and it’s interesting to see how it will play out. Right now, the political divisions just get worse and worse. Brexit could just be the beginning of what we see in Europe,” Rogoff added.

First Published:Sept 12, 2018 9:55 PM IST