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March 21, 2008 | Multinationals Face Political and Economic Risks

Frederik C. Köncke: In an increasingly complex global environment, businesses are seeking a greater understanding of how they are at risk.

July 31, 2008 | How the Banks Can Win Back Confidence

Common efforts to reform the financial system are on the agenda and one step towards this aim is the wide dissemination of the final report of the Institute of International Finance’s committee on market best practices which contains guidelines of conduct necessary to rebuild confidence in the global banking system. ++ It is a breakthrough step as for the first time global financial leaders

July 30, 2008 | The Global Economy Needs to Slow Down

The deepening financial crisis may seem a rationale for expansionary global macroeconomic policy. ++ Individual countries may see some short-term growth benefit to US-style macroeconomic stimulus, albeit these vantages will be minimal compared to the inflantation which they initiate. ++ There is a need to introduce more banking discipline and to call on policymakers to refrain from excessively

July 14, 2008 | The Fed Won't Solve Fannie and Freddie's Problems

Despite warnings of their imminent collapse, with the help of US government, Fannie Mae and Freddie Mac should be able to survive and stock market panic can be avoided. ++ Since the two companies have $5.3 trillion in liabilities, the Fed will need to step in if they become insolvent or consequences could be dire. ++ Their survival, however, is not necessarily good news: governmental intervention

July 14, 2008 | Europe Should Lead Global Financial Reform

Outperforming the dollar and the yen, the euro is a resounding success. ++ Still, Eurozone policymakers should allow for more economic freedom and encourage competition. ++ Europe should stop supporting national enterprises and give the ECB more support. ++ In terms of external economic policy, Europe should offer the world its experience and help reform the G8 and IMF as well as deal with

July 2, 2008 | Monetary Policy Must Tighten to Avoid Future Crises

According to a report by the Bank of International Settlements, the ongoing financial crisis has revealed the folly of lax monetary policy during periods of rapid credit growth and asset prices. ++ Central banks and financial institutions should approach the system holistically, not targeting certain individuals, but rather exercising “macroprudential” policies, which focus on

April 24, 2008 | Will the Chinese Change International Institutions?

The appointment of a Chinese Professor, Lin Yifu, to the post of chief economist at the World Bank reflects the changes in the global balance of powers. ++ In the past, the World Bank, like the IMF, was traditionally dominated by American, Europeans, and their neoliberal agenda. ++ However as American financial pillars are now underpinned by Chinese money, it has become impossible to ignore

April 14, 2008 | Africa's Fragile Triumph Over Global Financial Turmoil

The rise of American philanthropy and foreign investment, as well as the need for raw materials are protecting Africa’s frontier economies from international economic volatility. ++ Yet a slowdown in the US and EU could lead to the decrease of the significant cash
infusion from immigrants. ++ And investors are undependable since they fear political turmoil in formerly stable Nigeria, Kenya and

April 10, 2008 | Financial and Leadership Deficits

The current financial crisis demands strong governmental actions, particularly in the US. ++ The US’s financial problems can be explained through the debt crisis, credit crunch, and housing bubble which lead to a consumer binge. ++ The government should help homeowners stay in their homes and engage in effective rescues when necessary. ++ This downturn is only made worse by the current US

March 28, 2008 | US Financial Crisis: An Advantage for Russia

Russia could benefit from the US financial crisis if Americans transfer their excess liquidity to currencies such as the ruble which are likely to appreciate. ++ Russia is enticing to foreign investors: the ruble is undervalued, Russian equities are cheap, and commodities are scarce. ++ Yet Russia will also face risks as a sudden increase in capital inflow could lead to reduced reform and

March 18, 2008 | "Fighting Recession With Panic"

As a reserve currency, the US dollar’s value was only sustainable while the economy was growing. ++ As many economists expect a recession, the Fed is moving aggressively to pump more liquidity into the US banking system. ++ This and increasing trade protectionism are adversely sustaining consumption, hindering capital formation and entrepreneurship, and halting the creation of wealth necessary to

March 18, 2008 | Increasing Intervention to Deal With the Market Crisis

Europe and Japan’s deafening silence in the face of the US’ market crisis is exacerbating the credit turmoil. ++ US policymakers should alter contracts for mortgage holders and/or use the government’s balance sheet to support the housing market. ++ The Federal Reserve must act in unfamiliar ways, because its traditional instruments are “too blunt.” ++ Coordination with international central banks

March 11, 2008 | Global Capital Markets: The USA Stands its Ground

The world financial
markets’ present bout of turbulences should not hide the long-term and often brighter
trends:

Despite
occasional crises, global financial assets have expanded continuously over the
last decades. In 2006 alone, global assets increased by 17% to 167 trillion
USD.
The
growing importance of emerging countries’ financial markets and their
increasing integration in

December 21, 2007 | The US Sub-Prime Crisis: Mortgage Bonds and the Sociology of Repossession

The inner-workings of the sub-prime crisis in the United States are explored by the BBC. Scrutinized are its origins and its effects, but particularly the role of the mortgage bond market in the outcome and current challenges.

The city of Cleveland is used as a representative example of the complications, given financial institutions capitalized on its predominant character as working-class,

May 31, 2007 | Bruegel Says Worldwide Exchange Rates Adjustment Would Fight Current Account Deficits

The March 2007 Bruegel Policy Brief reveals that imbalances in global current account positions are not sustainable and need adjustment. A 15% depreciation of the dollar and an appreciation of Asian currencies is needed in order to:

• reduce the US current account deficit,
• faciliate China’s focus on domestic demand and reduce its accumulation of foreign exchange reserves, and
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