When the economic tide began to turn in 2006, as US housing prices peaked, few expected more than a gentle slowdown. After a record-long worldwide expansion, policymakers were congratulating themselves on having tamed the business cycle. That “great moderation” now looks more like a grand illusion – or at least a more equivocal victory than once thought.

The length and strength of the boom were in no small part due to a complex financial system that multiplied the expansionary effect of gushing liquidity. When the slowdown eventually came, that financial system seized up. The downturned became an avalanche.

It took staring into the abyss to concentrate leaders' minds, after initial halting responses to the crisis and denials of its severity. But at their Washington summit last November, after the Lehman collapse and the financial panic that ensued, G20 countries vowed to work together to prevent a second great depression, a commitment renewed in London in April.