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Posts Tagged ‘economy’

British Prime Minister Gordon Brown outlined the reforms that the largest world economies agreed to in the G20 summit. The call is for greater global economic cooperation to self-regulate and to prevent banking excesses from happening again.

Has history finally changed us for the better?

Some of the reforms mentioned by Gordon Brown:

  • New reforms of the global banking system, including institutions such as hedge funds, and other parts of the so-called “shadow banking system” coming under global regulatory control for the first time
  • Tighter regulation for credit rating agencies, to prevent conflicts of interest
  • A list of tax havens to be published immediately, and sanctions to be deployed against countries that do not comply with anti-secrecy regulations
  • Completion of the creation of international colleges of supervisors for national regulators
  • An agreement to do whatever is necessary to promote growth in individual countries, allowing for the possibility of the further use of fiscal stimuli in the future
  • The injection of an additional $1tn into the global economy through measures including a $500bn increase in the funding available to the IMF, an increase in the availability of money for developing countries through the IMF’s “special drawing rights” to $250bn and a total of $250bn being set aside for trade assistance
  • Reform of institutions such as the IMF to allow countries like China to have greater influence. Senior posts at the IMF and the World Bank will open to candidates from the developing world.
  • Renewed commitment to the millennium development goals.
  • $50bn for the world’s poorest countries.
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Boo Chanco writes for the Star:

I came across an analysis of the Philippine situation in the context of the global financial crisis that’s the best I have seen so far. It was prepared by Deutsche Bank – Equity Research about two weeks ago. The title of this column today is from that study and I think it captures the picture. I want to share it with our readers in the public interest because it would help them get the proper perspective of where we are at.

See the rest here.

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Iceland is now in the grips of what can only be termed as “hyperinflation”. We talked about Iceland recently in light of the ongoing global financial crisis, and as it turns out the near-full-collapse of Iceland’s financial system is connected to the the turmoil in both the US and the UK. It can be considered a microcosm in fact, which we should all study.

Global Europe Anticipation Bulletin (GEAB) wrote recently:

Studying the case of Iceland can give an idea of the upcoming stages of the crisis. That is what our team has been doing ever since the beginning of 2006. This country indeed provides a good illustration of what the US and the UK should be expecting. It can be considered – and that is what most Icelandic people do today – that the collapse of Iceland’s financial system came from the fact that it was disproportionate to the size of the country’s economy.

The interesting point is how the situation in Iceland can be a good indicator of what lies ahead for the US and UK. GEAB lists the following key points:

  • The recent upward trend of the US Dollar is a direct and temporary consequence of the collapse of stock markets
  • Thanks to its recent « political baptism », the Euro becomes a credible « safe haven » value and therefore provides a « crisis » alternative to the US dollar
  • The US public debt is now swelling uncontrollably
  • The ongoing collapse of US real economy prevents from finding an alternative solution to the country’s defaulting
  • « Strong inflation or hyper-inflation in the US in 2009? », that is the only question.

Check out more of GEAB’s illuminating write-up here.

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Unlike goldilocks, it isn’t a question of too hot, too cold, and just right.

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