Rescuing our jobs and savings: What G7/8 leaders can do to solve the global credit crisis

Richard Baldwin, Barry Eichengreen, 9 October 2008

Edited by Barry Eichengreen and Richard Baldwin

Published 9 October 2008

URL: http://www.voxeu.org/index.php?q=node/2327
Topics: Financial markets
Tags: rescuing jobs and savings, subprime crisis

What Europe should do in the shadow of the financial meltdown

Michael Burda, 9 October 2008

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As Europe’s financial markets spin down into the vortex created by the US credit crisis, every new day will contain new surprises. Only a few months ago, the real economy looked solid, with the euro providing an impressive shield from financial disruption (imagine last year without the ECB!).

Topics: Financial markets
Tags: rescuing jobs and savings

The wrong financial crisis

J. Bradford DeLong, 10 October 2008

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All of us from Lawrence Summers to John Taylor were expecting a very different financial crisis. We were expecting the ‘Balance of Financial Terror’ between Asia and America to collapse and produce chaos. We are not having that financial crisis. Instead we are having a very different financial crisis.

Topics: Financial markets
Tags: rescuing jobs and savings

An efficient rescue plan

Roger Craine, 9 October 2008

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Financial events moved like a firestorm during the last three weeks, easily jumping the firebreaks put in place by the Federal Reserve and US Treasury. Saving most financial institutions requires a quick and decisive responsive programme that strikes at the source of the financial implosion.

Topics: Financial markets
Tags: rescuing jobs and savings

Governments should buy straight preferred stock in their banks

Charles W Calomiris, 9 October 2008

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The G7 needs to follow the UK's plan, and do so on a coordinated basis. That plan has two parts. First, the governments must work together to share the burden of standing behind interbank borrowing in the LIBOR market for a brief time (probably not to exceed a month), and also continue to support the commercial paper market.

Topics: Financial markets
Tags: rescuing jobs and savings

A proposal to tackle the crisis in Europe

Luigi Guiso, Marco Pagano, 9 October 2008

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While the US is trying to attack the bank solvency crisis with the Paulson Plan, no comparably comprehensive response is emerging in Europe. No single political institution in Europe can enact a comprehensive rescue package comparable to that of the US.

Topics: Financial markets
Tags: rescuing jobs and savings

Why government responses need to be comprehensive and coordinated

Charles Wyplosz, 9 October 2008

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The Lehman Brothers story has shown two things – banks cannot be simply allowed to go bankrupt and a piecemeal approach will not bring banking systems back into minimal functioning condition. The lesson is that there will have to be a bailout. The contagion from the US to Europe and now to most other parts of the world further shows that the bailout will have to be global.

Topics: Financial markets
Tags: rescuing jobs and savings

The content of coordination

Barry Eichengreen, 9 October 2008

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If the events of the last week have a silver lining, it is that they have driven home the fact that we are all in this together. The crisis is global. We will sink or swim together. The hurried decision of G7/8 finance ministers to meet in Washington on Friday is belated recognition of this fact.

Topics: Financial markets
Tags: rescuing jobs and savings

The need for a comprehensive and global solution

Stijn Claessens, 9 October 2008

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We are facing a global financial crisis and bold steps by policy makers gathering this week in Washington are urgently needed. It has become clear that the policy interventions to date have not restored confidence in markets. Rather, at times, by being ad-hoc, interventions have actually created more turmoil. A comprehensive and global approach is needed.

Topics: Financial markets
Tags: rescuing jobs and savings

A strategy emerges: The right policies to deal with the crisis

Richard Portes, 9 October 2008

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The acute phase of the crisis was triggered by the failure of Lehman Brothers. This and the associated confusion in the markets about government policies caused a sharp rise in perceived counterparty risk, which completely blocked the short-and medium-term money markets.

Topics: Financial markets
Tags: rescuing jobs and savings

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