Uh Oh …
“The IMF warned on Saturday that the global financial system was on the brink of meltdown, while France and Germany pushed ahead with a pan-European crisis response to try to prevent the worst global downturn in decades.
At a joint news conference, French President Nicolas Sarkozy and German Chancellor Angela Merkel said they had “prepared a certain number of decisions” to present at a Sunday meeting of European leaders as they work feverishly to restore blocked credit markets to working order.
The United States appealed for patience, but the International Monetary Fund stressed that time was running short after leading industrialized nations failed to agree on concrete measures to end the crisis at a meeting on Friday.
“Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown,” IMF chief Dominique Strauss-Kahn said.”
Under the circumstances, I really wish the G7 had agreed on something a bit more substantial. In their communique Friday, the G7 nations pledged to “take decisive action”, “take all necessary steps”, etc., but did not explain what those actions and steps might be. Yesterday, the Group of 20 came up with “no concrete offers of new moves”, though they “staged repeated displays of unity.”
We need more than displays of unity right now. Willem Buiter has a good post outlining the areas that require the kind of international cooperation we seem to have failed to achieve. He characterizes the G7 agreement as “the absolute minimum required not to have their Washington DC meeting on Friday, October 10 characterized as an abject failure.”
We need more than this. And we are running out of time.