The right lessons from the global turmoil
There is a reason why the theme of the FE Best Bank awards this time is ‘Lessons from the Financial Turmoil’. No matter when the world emerges from the crisis—and one feels the emerging economies from Asia will be the first bloc to emerge—it will be necessary to read the right lessons.
The last time around, the multilateral financial architecture developed at Bretton Woods was not particularly successful in drawing up the right lessons from the Great Depression.
The subsequent scale and pace of globalisation that wiped poverty from large swathes of the globe was developed on a platform engineered by financial innovation, but which was never a part of the blueprint developed by either the IMF or the World Bank. Which is why it’s crucial that we get it right this time.
It’s also important that the government steps in cautiously. In successful economies, governments and the private sector have played a mutually supportive role. The current spate of bailouts only serves the role of providing a sovereign guarantee to the nervous stock and credit markets. They are not an agenda for the government to run the banks or insurance companies.
Without the presence of the financial sector and the capital that
Be the first to comment.