BRIAN MILNER AND BARRIE MCKENNA AND HEATHER SCOFFIELD From Saturday`s Globe and Mail
November 14, 2008 at 8:58 PM EST
Brazil`s populist President, Luiz Inacio Lula da Silva, took the podium in Sao Paulo last weekend to deliver a blunt speech to 20 global powers, essentially saying: You started it. Now fix it.
“No country is safe from the financial crisis. We are all being affected by the problems that started in the advanced countries,” Mr. da Silva told finance ministers and central bankers of the G20 countries.
The chastened ministers had no choice but to sit there and agree. And then they got to work. They put their stamp of approval on what is becoming a consensus about what is needed to put the global economy and financial markets back on track.
On Saturday, the G20 political leaders will sanction their approach. They want the leading developed countries to devise more ways to restore credit markets, keep slashing interest rates to stimulate growth and pour much more government money into fiscal stimulus packages.
All of these are emergency measures that are indeed critical. But they amount to calling out the fire brigade to put out a kitchen blaze in a shoddily maintained mansion.
Once the flames are doused, the owners will have to commit to an extensive and costly rebuilding of everything from the cracked foundation, the crumbling walls and the outmoded wiring and plumbing to the badly leaking roof. And that`s on top of the structural damage wrought by the hurricane-force financial storms.
The best we can hope for out of the unprecedented G20 gathering are some cosmetic improvements, a professed commitment to working together and lots of talk about serious reforms down the road.
Here are key trouble spots that will have to be addressed – some sooner than others, but all of them eventually – to reduce the likelihood that the global financial system will fall prey to another “once-in-a-lifetime” catastrophe any time soon.
Read on for the solutions in the analogy here http://www.theglobeandmail.com/servlet/sto...5/BNStory/Front
November 14, 2008 at 8:58 PM EST
Brazil`s populist President, Luiz Inacio Lula da Silva, took the podium in Sao Paulo last weekend to deliver a blunt speech to 20 global powers, essentially saying: You started it. Now fix it.
“No country is safe from the financial crisis. We are all being affected by the problems that started in the advanced countries,” Mr. da Silva told finance ministers and central bankers of the G20 countries.
The chastened ministers had no choice but to sit there and agree. And then they got to work. They put their stamp of approval on what is becoming a consensus about what is needed to put the global economy and financial markets back on track.
On Saturday, the G20 political leaders will sanction their approach. They want the leading developed countries to devise more ways to restore credit markets, keep slashing interest rates to stimulate growth and pour much more government money into fiscal stimulus packages.
All of these are emergency measures that are indeed critical. But they amount to calling out the fire brigade to put out a kitchen blaze in a shoddily maintained mansion.
Once the flames are doused, the owners will have to commit to an extensive and costly rebuilding of everything from the cracked foundation, the crumbling walls and the outmoded wiring and plumbing to the badly leaking roof. And that`s on top of the structural damage wrought by the hurricane-force financial storms.
The best we can hope for out of the unprecedented G20 gathering are some cosmetic improvements, a professed commitment to working together and lots of talk about serious reforms down the road.
Here are key trouble spots that will have to be addressed – some sooner than others, but all of them eventually – to reduce the likelihood that the global financial system will fall prey to another “once-in-a-lifetime” catastrophe any time soon.
Read on for the solutions in the analogy here http://www.theglobeandmail.com/servlet/sto...5/BNStory/Front
