Over the past decade, Chinese trade revenues, savings and purchases of US debt increased. Low interest rates encouraged US consumers to spend and housing prices soared. But such imbalances could not be sustained and financial instruments containing mortgages for homes that have lost their value, have proven toxic for the world. Economists and central bankers are still struggling to find a way out of the subprime mortgage crisis. If Japan’s lost decade offers lessons, then deflation must be averted at all costs if there is to be hope for a recovery.. But for the long-run, one magical phrase emerges from experts and that’s “stricter regulations for the banking industry.” Once governments succeed in restoring consumer and investor confidence, they should focus on designing regulations that encourage responsibility and a long-term outlook. Furthermore, policymakers have to recognize the need for global oversight of the banking industry, either by strengthening existing institutions or by creating new international authorities. The timing of the rescue is uncertain, and the certainty of its efficacy remains in question. To put the matter in historical perspective, there is still no consensus on whether government spending policies of Franklin D. Roosevelt or increased demand for goods created by Second World War pulled the United States out of the Great Depression. One certainty for this crisis: there are no localized solutions for a problem that extends throughout the world.

Anger Divides America Blocking New Thinking

Americans must rise to the challenges, speaking out on issues and avoiding extremism
Lewis M. Simons
January 31, 2011

China and the EU: Building a Reciprocal Relationship

With the eurozone crisis, China becomes Europe’s lead rescuer
Doug Saunders
January 21, 2011

The Markets Prey on Debt-Laden Nations

The US is next for the chopping block as global investors demand higher interest rates
Joergen Oerstroem Moeller
January 17, 2011

Lessons Learned, South Korea Makes Quick Economic Recovery

The US should follow South Korea’s model by enacting swift financial reform
Martin Fackler
January 17, 2011

Running the World, After the Crash

International cooperation is stalled
Richard Samans, Klaus Schwab, Mark Malloch-Brown
January 13, 2011

Asia: Eastern Billions Can Still Join the World

India and China prepare to become the focus of globalization 2011
Nandan Nilekani
January 5, 2011

Where Are the Jobs? For Many Companies, Overseas

Multinationals hire in Asia and South America, rather than Europe or US
Pallavi Gogoi
January 4, 2011