The Lehman Brothers filed for bankruptcy on Sept 15, 2008, triggering the global financial crisis that left the global economy tottering. Ten years on, the world is still feeling the repercussions of the crisis. Beijing News commented on Tuesday:

Learning lessons from history can help us avoid repeating the same mistakes. Although opinions vary on what caused the global financial crisis, excessive debt and credit were definitely the prime cause.

A series of financial derivatives, such as housing and asset mortgage loans, peaked in the few years prior to 2008, and asset securitization seemed to have matured. To expand the market, some banks and financial institutions lowered their credit threshold for loans, which led to systemic risks in the market and sowed the seeds of the subprime crisis. Since people could buy a house even with zero down payment, the whole financial system was exposed to risks.

Immediately before the crisis, the leverage ratio of the major investment banks was as high as 40 to 1, which means they had only $1 to cover a possible loss of $40, and a 3 percent fall in property prices was enough to break the camel's back.

Market supervisors paid no attention to the risks, allowing financial institution to stealthily securitize some risky subprime loans and sell them to investors without informing them of the possible risks.

The crisis should prompt China to take steps that will ensure its financialization and asset securitization measures are prudent. Besides, decision-makers must not seek quick success. Since the deleveraging measures in the financial sector will take time to yield results, the decision-makers should be patient. There are no shortcuts when it comes to reform.

China must strengthen its supervision of the financial market to tackle the risks and ensure the healthy development of the markets. It should also make sure the development of the financial sector serves the real economy, especially the medium-and small-scale enterprises.