History plays a very important role in society. It connects us to our ancestors and where we have come from. History also plays a very important role in helping us navigate the present and future. History helps us understand economics, national politics, and geopolitics. Political and business leaders need a thorough and rounded education in history. But it appears that they are not getting it. Niall Ferguson in the provocative video below explains why this is the case. In effect, he claims that university history departments are in the process of making themselves irrelevant because political, social and economic history are being squeezed out of the curriculum by anachronistic and politically correct history courses.
As an undergraduate, I was taught about the failure of Herstatt Bank in 1974 and Herstatt risk. This bank was only the 35th largest bank in Germany at the time so why would anyone be interested in studying its failure? Herstatt failed because of its involvement in risky foreign exchange business. When it closed its doors on 26 June 1974, counterparty banks (mainly in New York) had not received dollars due to them because of time-zone differences - this is known as settlement risk. The cross-jurisdictional implications of its failure resulted in the Bank for International Settlements setting up the Basel Committee on Banking Supervision and Herstatt's failure was a key reason for the establishment of real-time gross settlements systems, which ensures that payments between two banks are executed in real time. The Bank of England's Ben Norman has an interesting post on Herstatt over at the Bank's new blog ( Bank Underground ). As well as giving an excellent overview of