The Great Debate UK

from The Great Debate:

How G20 can unfreeze credit and cut bailout costs

Lena Komileva-- Lena Komileva is Head of G7 Market Economics, Tullett Prebon --

One of the big historical lessons of this crisis for economic policy is that bringing down the risk-free cost of money - central bank rates or government bond yields - and injecting liquidity into the banking system cannot on their own fix broken credit markets.

Quantitative easing by central banks may help to solve short-term liquidity problems for domestic borrowers and lenders, by going around broken markets during times of extreme financial and economic uncertainty. However, this is no substitute for efforts to restore international credit markets back to health.

Effective policy measures would contain the economic fear and channel private sector incentives – the foundation of free markets - in a way that alters the behaviour of lenders, companies and consumers. The end-game policy strategy cannot be to replace free markets.

So why have traditional monetary stimuli failed to end this crisis? And what should be done next?

from The Great Debate:

Obama honeymoon ends in Europe

Robin Shepherd

-- Robin Shepherd is Director, International Affairs at the Henry Jackson Society. His areas of expertise are transatlantic relations, American foreign policy, Middle Eastern relations with the West, Russia, eastern Europe, NATO and the European Union. The views expressed are his own. --

It is to be hoped that President Obama has a developed sense of humour. The man heralded by many as the new Messiah of political renewal lands in London this week not to the chorus of approval he might have expected on his first official trip to Europe but to crowds roaring with anger and frustration at the global economic system which his country underpins.

from The Great Debate:

Reform the IMF and World Bank

Johannes Linn- Johannes Linn is a Senior Fellow and the Executive Director of the Wolfensohn Center for Development at the Brookings Institution. The views expressed are his own. --

One of the tasks for the G20 Summit in London is the reform of the IMF and the World Bank, key global institutions to help address the current crisis and to prevent the occurrence of future crises. Reform of the IMF is more urgent both in the short and medium term while reform of the World Bank, although equally important, is less pressing.

from The Great Debate:

G20 should be pragmatic about protectionism

Paul Blustein-- Paul Blustein is a journalist-in-residence at the Brookings Institution. He is writing a book on the World Trade Organization, which will be published in September. The views expressed are his own. --

Telling young people to abstain from sex is “not realistic at all" -- new mother Bristol Palin, 18.

from The Great Debate:

World stuck with the dollar, more’s the pity

jimsaftcolumn5-- James Saft is a Reuters columnist. The opinions expressed are his own --

The dollar is, and will remain, the U.S.'s currency and its own and everyone else's problem.

The idea of creating a global currency, as espoused by China earlier this week, is interesting, has a certain amount of merit and is simply not going to happen any time soon.

from The Great Debate:

A new direction in global financial regulation

John Kemp Great Debate-- John Kemp is a Reuters columnist.  The views expressed are his own --

UK Prime Minister Gordon Brown's call today for a new G20 charter of principles on financial regulation  reflects an emerging consensus among policymakers that, once the immediate crisis has passed, the regulatory framework must be fundamentally redesigned.

In particular, policymakers are concerned with how to correct the basic moral hazard problem in which bankers have an incentive to extend too much credit, while private firms and households have an incentive to take on too much debt.

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