I’ve watching events unfold in the global financial markets with a mixture of incredulity and fear – like most other people I suppose.  What has transpired in the last couple of weeks would have seemed unthinkable a month or two ago and nobody seems to be able to call the low point in this whole mess.

What strikes me about it is the way in which certain key cultural characteristics – especially in the USA – may have been to key contributory factors to the problems.  Let me briefly explain what I mean by this:

•    Individualism:  A key US characteristic (seen as a virtue in the States) which leads employees to have less of a sense of responsibility to the company and more of a sense of responsibility to themselves.  This is one of the great strengths of the US economy but is it possible that, if left unchallenged, it can have the consequence of people making short-term decisions to better themselves at the expense of a greater whole?

•    Short-termism:  One of the by-products of economies which are mainly equity financed (USA, UK etc.) is that people are driven by quarterly results.  This again leads to people taking short-term decisions and looking for ‘quick wins’ at the expense of a more coherent long-term strategy.  This short-term outlook is, of course, exacerbated by a bonus culture which rewards people for delivering results NOW.

•    Enthusiasm:  One of the biggest differences in approach to business between employees in the US and many of their European colleagues would be that, whereas people in the US are expected to have a positive, enthusiastic, ‘can-do’ mentality, many Europeans would expect to show a more cautious (even cynical) approach.  This leads people in the States to feel a need to join in enthusiastically with new ideas and to be seen as really positive.  Can this also lead to a lack of rigorous analysis?  Are people afraid to challenge bad ideas because of the risk of seeming negative and a ‘trouble-maker’?

It seems to me that the three strong cultural characteristics outlined above could have been strong contributory factors to a system that allowed trillions of dollars of loans to be made to people who everybody knew would struggle to make the repayments.

Don’t get me wrong, I’m not criticising USA here – we’ve all enjoyed the fantastic ride for the last few years.  These US cultural characteristics led us all into an era of unprecedented growth and prosperity and perhaps we should be grateful for that.

Maybe what we need now is a dose of Asian long-termism and caution!

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