It's 30 years since global markets went into total meltdown. While losses from The Great Depression and global financial crisis ended up being worse, mid-October 1987 saw the biggest one-day losses in the history of most major markets.

In the US it happened at the start of the week — the day known as Black Monday saw the Dow Jones Industrial Average tumble by a record 23 per cent.

The Australian market had seen heavy selling in the days leading up to it, but Black Tuesday's 25 per cent slump was unprecedented.

Brokers on the floor that day were flooded with calls from desperate sellers, but had no-one on the other end of the line who wanted to buy.

Geoff Wilson now runs his own funds management business, but back then he was a 30-year-old stockbroker.

Share traders frantically call trades during the Black Tuesday crash of October 20, 1987. ( ABC News )

"One thing that you learnt in 1987 is that equity is forever — you can't assume that there is someone you can sell your shares to," he told The Business.

The crash was the ultimate effect, but what was the cause?

Sir Ron Brierley was one of the most feared corporate raiders of the time, pouncing on vulnerable businesses with takeover offers too good to refuse.

He was also one of the only ones to survive, financially.

"A lot of it was borrowed money, that was the problem — that was a disaster waiting to happen," he said.

"Most companies were overborrowed — we were overborrowed but not as much as some others, when the crunch came their liabilities exceeded assets."

'Just left skid-marks on the pathway of progress': Keating

The 1980s was the era of the entrepreneur — the likes of Alan Bond, Christopher Skase, Robert Holmes a Court, John Spalvins and others dominated the business pages with audacious takeovers.

Many of them also featured on the social, sport and front pages with their lavish lifestyles.

Most failed to survive financially much past the 1987 share crash.

"The Australian stock exchange created an index called the entrepreneurial index which made up 10 per cent of the market by capitalisation on the first of October 1987 — at the end of '87 it was worth zero, nearly all the entrepreneurs had gone under," Mr Wilson observed.

Alan Bond sits at the wheel of Australia II with a child, Jeremy, in 1983. ( Grant Simmer )

Then-treasurer Paul Keating says that's no great loss.

"They just left skid-marks on the pathway of progress," he told The Business in a trademark quip.

Although Mr Keating acknowledges one of his signature economic policies contributed to the entrepreneurs' debt-fuelled ascension.

"With the deregulation, which I had opened up from 1984, we're then three years [on], the banks were trying to burn off the foreign banks, they were lending indiscriminately."

Sir Ron witnessed the corporate lending orgy first hand.

"The banks weren't saying no, they were saying yes," he said.

"I was chairman of the Bank of New Zealand at the time and we'd get reports saying that this loan was recommended, but there were people I wouldn't lend a cent of my own money.

"But that was the mood at the time."

Not that he was averse to a bit of debt himself.

"BIL [Brierley Investments Limited] as a group had $11 billion in borrowings," Sir Ron reflected.

"I really changed my mind — I'd viewed $11 billion as more or less an asset, that we were able to borrow so much, and suddenly I realised it was a liability."

It was like someone flicked a switch — debt went from desirable to death.

It is reminiscent of the lead-up to the global financial crisis — pre-GFC, companies were slammed if they had a "lazy balance sheet", that is not enough debt. But when the crisis hit, "overleveraged" (heavily indebted) firms became the prime targets.

Along with the big boys, Geoff Wilson says a handful of smaller investors got caught up in the debt binge.

"It was more the retail investor that had thought this is very easy, the market always goes up I'll just buy shares, I'll gear into it," he remembered.

"Then, a lot of people, their life was destroyed because they'd geared up and they'd lost all their money."

How the 1987 crash helped trigger the 1990s recession

The big difference between the GFC and the 1987 crash was the economic response.

In 2008 the economic fallout was immediate, with almost every developed nation in recession by early 2009.

But in 1987 most share markets bounced back fairly quickly — Wall Street's Dow Jones index recovered to its pre-crash high two years later, although Australia's market took nine years to fully recover.

The economic fallout from 1987 took a few years to play out but, at least in Australia, Paul Keating says the share crash did play a key role.

Sorry, this video has expired Recession we didn't have to have: Former PM Paul Keating blames Reserve Bank for lifting rates too late

"We had wages growth put pressure on the accord and so I wanted interest rates to be shifting up from about the third quarter or second quarter of 1987," he said.

"The [Reserve] Bank just completely stopped when the [October 1987] crisis came, and I didn't succeed in having the bank lift interest rates until the third quarter of '88.

"The problem is, because the bank had waited so long, we then had to push the rates much higher and that brought on the recession of 1990.

"Because the rest of the world went into recession in 1990, whether we would've avoided the recession in 1990 is a moot point. The answer is we probably would've."

Although Mr Keating still sees positives coming from the recession he famously said "we had to have".

"The recession did break the back of inflation," he argued.

"It was the recession, or slowdown, we had to have, there's no doubt about that.

"And we've had 26 years of growth and low inflation since, as I thought we would.

"And, of course, when I left, Howard and Costello, talk about lucky mugs, just picked up the new model, just put it in their pockets, didn't even say thank you."

'When interest rates start going up the crunch will come'

Perhaps this is another key lesson from comparing the '87 crash with 2008.

In the late '80s, with inflation still a serious threat, many central banks did have to keep hiking rates.

Veteran stockbroker Brent Potts said tight monetary policy caused a lot of the carnage.

"The lesson that's been learned is when you have a crisis like that don't turn off the tap — you've got to let the water run and try and stimulate the economy rather than contract it," he told The Business in his first interview in decades.

But Geoff Wilson says there are problems with the stimulus approach taken by central banks in response to the GFC.

"The US bull market is the third longest bull market — it's been going for eight-and-a-half years — we are at the stage of a very mature bull market, so risks are elevated.

"Bull markets don't go forever and I think this one is pretty close to running its course.

"What concerns me about the market at the moment is, because interest rates are so low and because the volatility in the market has reduced over the past couple of years, then people aren't appropriately pricing risk."

It's a concern shared by Paul Keating.

Sorry, this video has expired US Fed has 'pushed investors into higher risk', warns former PM Paul Keating

"The whole point of quantitative easing has been to push investors into higher levels of risk, that's the essence of the policy, and they've taken on the risk with a gusto," he said.

"I've been surprised by how sanguine the markets are in the face of what is obviously a turning point for the Federal Reserve in America."

He argues that the Fed has had a long history of keeping rates too low, too long, particularly under former chairman Alan Greenspan.

"I can't divine a pathway out of QE," he said.

"Greenspan was a serial bubble blower, fundamentally.

"The Greenspan put before the Asian crisis in 1997, the Russian debt crisis after that, the long term credit bank, South America and then, of course, 2009. He was gone by 2009, but he established the conditions in the lead up to 2009.

"The Fed has been into bad behaviour for a long time.

"Whether psychologically the Fed can get out of it now, and we can actually get back to monetary conditions appropriate for an economy that's growing at plus 2 per cent GDP on such a big scale, we don't know. I think so, but we don't know."

Mr Keating has praise for the Reserve Bank's more cautious approach, but warns care is still required.

"If I were the Reserve Bank today I'd be very cautious about asset prices, and so I'd be quicker on the [interest rate] up lever than not," he added.

It was that interest rate up lever that contributed to the 1987 crisis and 1990s recession, and Sir Ron believes it will trigger the next crisis as well.

"Certainly, with very cheap money, when interest rates start going up the crunch will come," he warned.

ETFs the ticking time bomb for another '87

When that crisis does come, both Brent Potts and Geoff Wilson see a new financial time bomb waiting to explode.

Sorry, this video has expired ETFs could trigger the next 1987 crash: Geoff Wilson

"If all of a sudden the herd decides to run the other way and everyone wants their money out of the ETFs then you're going to see significant selling on the market and liquidity tends to dry up," cautioned Mr Wilson.

ETFs, or exchange traded funds, are so-called passive investments — instead of owning a portfolio of shares or other assets directly, a fund buys shares or other assets on your behalf to track a particular index.

That's fine when those indices are going up, but if the market falls ETFs can add considerably to the wave of selling.

"If there is a roll over in the market and they go to liquidate those ETFs you can liquidate it, but the way you liquidate is the fund actually has to sell part of the portfolio to pay you out," Mr Potts explained.

"So, as the market falls, as they sell their securities and they get more redemptions, it can become self-fulfilling."

The other fear that Mr Potts has is that risk aversion itself is killing genuine entrepreneurship.

"There's not the entrepreneurial spirit on the [company] boards," he said.

"What's on the board now are people who are so concerned with corporate governance and so concerned of being sued.

"There are too many accountants on boards and too many lawyers on boards and not enough people on the coalface that understand the business that they are directors of."

The Business has a special edition tonight examining the causes of the 1987 crash and what lessons we can take from it. You can watch it at 8:30pm (AEDT) on ABC News Channel and 11:00pm on ABC TV.