Sir, Gillian Tett is distorting history by understatement ("The banks that politicians can be seen to embrace", February 18). She writes: "During the savings and loans crisis of the 1980s dozens of small banks collapsed." Dozens? Between 1982 and...

Most people know virtually no financial history, so when we have a financial crisis, it seems like it has never happened before. But it has, again and again. As Paul Volcker, former chairman of the Federal Reserve, remarked: "About every ten years, we have the biggest crisis in 50 years." 

The banking industry suffered credit crises in the 1970s, 1980s, 1990s, and 2000s. An unavoidable conclusion is that its loan loss reserves were in all cases too small. 

A systemic risk advisor might help ameliorate bubbles and busts, though not avoid financial cycles.

To make financial markets less vulnerable to their inevitable cycles, it is an essential responsibility of both private financial actors and government officials to study, develop and implement countercyclical approaches.

In reminding us how very different the present global economic cycle is from previous postwar economic cycles, Martin Wolf makes a number of fine points. However, the one salient point that he does not emphasise is how very compromised are the public finances in many major industrialised economies including the US, the UK, Japan, Italy and Spain.

While economic downturns can be frightening and difficult, people living in free market economies enjoy greater health, better access to basic necessities, better education, work less arduous jobs, and have more choices and wider horizons than people at any other point in history.