Comments on: Five steps to solve the financial crisis http://blogeuropa.eu/2008/10/07/five-steps-to-solve-the-financial-crisis/ Ideas, debates, analysis et al. Tue, 19 Jun 2012 15:18:17 +0000 hourly 1 By: MJN http://blogeuropa.eu/2008/10/07/five-steps-to-solve-the-financial-crisis/comment-page-1/#comment-124338 MJN Mon, 20 Oct 2008 08:46:25 +0000 http://blogeuropa.eu/?p=251#comment-124338 No hay duda de que los "policy makers" han seguido en buena medida tus recomendaciones. Te envío sus respuestas a tus sugerencias (todas ellas publicadas después de que enviaras tus propuestas) : 1. Deposit insurance http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1508&format=HTML&aged=0&language=EN&guiLanguage=fr 2- Liquidity ECB http://www.ecb.int/press/pr/date/2008/html/pr081015.en.html http://www.ecb.int/press/pr/date/2008/html/pr081013.en.html http://www.ecb.int/press/pr/date/2008/html/pr081008.en.html Regarding national TARPS : A number of national initialives led by the UK have been announced 3- National TARPS have been oriented to a large extent to recapitalize banks and to lower extent to buy assets. Although, mark to market rules in Europe have been definetly watered down.... It is your recomendation 4, the one that is most at risk ... Proposals 5 and 6 are not compatible with the economic recesion scenario that we are facing or any sound central bank policy would not be compatible with fostering inflation No hay duda de que los “policy makers” han seguido en buena medida tus recomendaciones. Te envío sus respuestas a tus sugerencias (todas ellas publicadas después de que enviaras tus propuestas) :

1. Deposit insurance
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1508&format=HTML&aged=0&language=EN&guiLanguage=fr

2- Liquidity ECB
http://www.ecb.int/press/pr/date/2008/html/pr081015.en.html

http://www.ecb.int/press/pr/date/2008/html/pr081013.en.html

http://www.ecb.int/press/pr/date/2008/html/pr081008.en.html
Regarding national TARPS : A number of national initialives led by the UK have been announced

3- National TARPS have been oriented to a large extent to recapitalize banks and to lower extent to buy assets. Although, mark to market rules in Europe have been definetly watered down….

It is your recomendation 4, the one that is most at risk …

Proposals 5 and 6 are not compatible with the economic recesion scenario that we are facing or any sound central bank policy would not be compatible with fostering inflation

]]> By: Concepto Global http://blogeuropa.eu/2008/10/07/five-steps-to-solve-the-financial-crisis/comment-page-1/#comment-123957 Concepto Global Sun, 19 Oct 2008 11:44:33 +0000 http://blogeuropa.eu/?p=251#comment-123957 All the solutions that you explain are the short way to be in the same scheme where we are now in some point of the future. All the "strategies" to fight against the economic cycle have failed. The fiduciary monetary system is dead without confidence and today's governments are unable to restore it. Some kind of gold standard should be explored. All the solutions that you explain are the short way to be in the same scheme where we are now in some point of the future. All the “strategies” to fight against the economic cycle have failed. The fiduciary monetary system is dead without confidence and today’s governments are unable to restore it.
Some kind of gold standard should be explored.

]]> By: Pablo http://blogeuropa.eu/2008/10/07/five-steps-to-solve-the-financial-crisis/comment-page-1/#comment-119303 Pablo Fri, 10 Oct 2008 14:32:45 +0000 http://blogeuropa.eu/?p=251#comment-119303 José, next Sunday afternoon Paulson will anounce partial nationalization of US banks, following UK's example, going directly to step 3 and probably reducing financial stress in a matter of weeks. Large countries in Europe will have to follow the same path. We are retrenching to a national Bank model after waiting in vain for one year for private Banks to solve their capitalization problems. We need to see consumer reactions to this new environment to make a judgement as to how deep this crisis has affected global economies. My view today is that the effect is not severe. José, next Sunday afternoon Paulson will anounce partial nationalization of US banks, following UK’s example, going directly to step 3 and probably reducing financial stress in a matter of weeks.

Large countries in Europe will have to follow the same path.
We are retrenching to a national Bank model after waiting in vain for one year for private Banks to solve their capitalization problems.

We need to see consumer reactions to this new environment to make a judgement as to how deep this crisis has affected global economies. My view today is that the effect is not severe.

]]> By: Víctor Torre http://blogeuropa.eu/2008/10/07/five-steps-to-solve-the-financial-crisis/comment-page-1/#comment-119297 Víctor Torre Fri, 10 Oct 2008 13:56:17 +0000 http://blogeuropa.eu/?p=251#comment-119297 I find Pablo's comment very inspiring, especially in these moments of distress. Present crisis -as most of them- is esentially a crisis of confidence. Credit flows scarce and very expensive because there is a general distrust in the capacity to repay it. The main task of economic authorities is to avoid panics and, if possible, to rebuild confidence. But it is not easy. Credit has grown so much during the last decades that budgets seem ants trying to lift a fallen elephant. Public debt, if rapidly increased, crowds out private investment -in this time of credi crunch!-. Printing massive amounts of money may create a huge inflation, especially in a context of recession. Cutting interest rates might not be effective (see what happened this week). I therefore think that the challenge is not only to take the right measures, but also to do it in a coordinate and serious way, so that they convey the confidence markets need. Much is expected from the G-7 meeting this weekend. I find Pablo’s comment very inspiring, especially in these moments of distress.
Present crisis -as most of them- is esentially a crisis of confidence. Credit flows scarce and very expensive because there is a general distrust in the capacity to repay it. The main task of economic authorities is to avoid panics and, if possible, to rebuild confidence. But it is not easy. Credit has grown so much during the last decades that budgets seem ants trying to lift a fallen elephant. Public debt, if rapidly increased, crowds out private investment -in this time of credi crunch!-. Printing massive amounts of money may create a huge inflation, especially in a context of recession. Cutting interest rates might not be effective (see what happened this week).
I therefore think that the challenge is not only to take the right measures, but also to do it in a coordinate and serious way, so that they convey the confidence markets need. Much is expected from the G-7 meeting this weekend.

]]> By: JMA http://blogeuropa.eu/2008/10/07/five-steps-to-solve-the-financial-crisis/comment-page-1/#comment-119189 JMA Fri, 10 Oct 2008 09:52:46 +0000 http://blogeuropa.eu/?p=251#comment-119189 Pablo, in view of the recent developments in the last 3 days, are these 5 steps still valid? it seems to be the financial sector is way too big to respond to governments measures. what do you think? best, Jose Pablo,

in view of the recent developments in the last 3 days, are these 5 steps still valid? it seems to be the financial sector is way too big to respond to governments measures. what do you think?
best, Jose

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