Unjustified Panic May Lead to Great Depression

Martin Wolf, Financial Times | October 9, 2008

The current breakdown in financial markets is driven by unjustified panic. ++ Restoring confidence in the financial systems should be the priority for American and European governments. ++ EU countries should offer a time-limited guarantee of the liabilities of the most systemically important institutions. ++ Coordination on how to proceed is necessary if banking systems are to reemerge healthy and strong. ++ G7 finance ministers and central bank chiefs meeting in Washington must have this in mind in order to avert another great depression.