U.S. Financial Crisis: The Global Dimension with Implications for U.S. Policy (Updated November 25, 2008)

摘要

What began as a bursting of the U.S. housing market bubble and a rise in foreclosures has ballooned into a global financial crisis. Some of the largest and most venerable banks, investment houses, and insurance companies have either declared bankruptcy or have had to be rescued financially. In October 2008, credit flows froze, lender confidence dropped, and one after another the economies of countries around the world dipped toward recession. The crisis exposed fundamental weaknesses in financial systems worldwide, and despite coordinated easing of monetary policy by governments and trillions of dollars in intervention by governments and the International Monetary Fund, the crisis continues. The process for coping with the crisis by countries across the globe has been manifest in four basic phases. The first has been intervention to contain the contagion and restore confidence in the system. This has required extraordinary measures both in scope, cost, and extent of government reach. The second has been coping with the secondary effects of the crisis, particularly the slowdown in economic activity and flight of capital from countries in emerging markets and elsewhere who have been affected by the crisis. The third phase of this process is to make changes in the financial system to reduce risk and prevent future crises. In order to give these proposals political backing, world leaders have called for international meetings to address changes in policy, regulations, oversight, and enforcement. Some are characterizing these meetings as Bretton Woods II. On November 15, 2008, a G-20 leaders summit recommended several measures to be implemented by participating countries by March 31, 2009. The fourth phase of the process is dealing with political and social effects of the financial turmoil.