Tuesday’s reappointment of Ben Bernanke as Chairman of the US Federal Reserve Board — accompanied by new highs for global stock markets and news of rising house prices and improving consumer and business confidence on both sides of the Atlantic — was a fitting symbol for the end of the financial crisis.

Whatever happens in the next few months — and some serious risks still lie ahead — it is now clear that a rerun of the 1930s Great Depression has been avoided. The Great Recession, which was predicted by many economists and pundits to be far deeper and more intractable than any previous postwar downturn, may go down in history as the Great Exaggeration.

Having said this, it would be foolish to assume that the world after the crisis will be the...