Friday November 14, 2008
Editorial Cartoon by Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator – Friday November 14, 2008
Stability will not be rebuilt in a day
Ahead of the G20 summit, some commentators have wondering whether we are going to see a new Bretton Woods.
It’s ambitious talk. It is not likely that a single summit will deliver anything so grandiose, especially an event hosted by a US president who almost has his coat on, ready to leave the White House for the last time.
But there is clearly a desire among political leaders from these leading economies to do something – or, some might say more cynically, to be seen to do something – about the financial crisis that has suddenly engulfed them all.
And it really has hit them, from different angles and with different degrees of severity. A short global tour of a few G20 countries will give a flavour of why they are so concerned. (Incidentally, it’s 19 countries, plus the European Union.)
The host, the US, is the main source of the financial poison – $1.4 trillion of it, according to the International Monetary Fund.
That is their latest estimate of the likely losses that will eventually be due to bad debts owed by American borrowers. Most of that is down to mortgages and financial securities based on them. (Source: BBC News)