A rejuvenated Gordon Brown travels early to a European Union summit today after receiving generous praise for his leadership role in Europe's response to the financial crisis. The Prime Minister will arrive in Brussels the day after the EU's leading official admitted that the multi-billion programme under which banks across Europe are being bailed out by their governments is the "Brown plan". The man who successfully fought Tony Blair to keep Britain out of the euro is enjoying as friendly relations with the leading members of the eurozone as his predecessor. He was even invited into the inner sanctum of the club last weekend to urge them to follow the British solution.
A rejuvenated Gordon Brown travels early to a European Union summit today after receiving generous praise for his leadership role in Europe's response to the financial crisis.
The Prime Minister will arrive in Brussels the day after the EU's leading official admitted that the multi-billion programme under which banks across Europe are being bailed out by their governments is the "Brown plan".
The man who successfully fought Tony Blair to keep Britain out of the euro is enjoying as friendly relations with the leading members of the eurozone as his predecessor.
He was even invited into the inner sanctum of the club last weekend to urge them to follow the British solution.
But given that it's about to fail too, what will it be called then? In the long run, we're all dead. John Maynard Keynes
While countries around Europe are snapping up financial institutions, "the Swiss government says it doesn't need to", said Mr Nason. On the contrary. Rather than folding, Credit Suisse is at the heart of the recovery plan that has delighted stock markets over the past couple of days. Gordon Brown may be taking the credit for the scheme, but it has emerged that it was Credit Suisse's economic boffins who came up with it in the first place, bivouacking in the corridors of the Treasury last week while spinning a safety net for the world's financial institutions. Despite appearances, Switzerland is certainly not immune from the coming recession. Figures released last week estimate growth for next year down to 1*3 per cent. But economy secretary Jean Daniel Gerber has more to be cheery about than most of his colleagues around Europe, and indeed the world.
While countries around Europe are snapping up financial institutions, "the Swiss government says it doesn't need to", said Mr Nason.
On the contrary. Rather than folding, Credit Suisse is at the heart of the recovery plan that has delighted stock markets over the past couple of days.
Gordon Brown may be taking the credit for the scheme, but it has emerged that it was Credit Suisse's economic boffins who came up with it in the first place, bivouacking in the corridors of the Treasury last week while spinning a safety net for the world's financial institutions.
Despite appearances, Switzerland is certainly not immune from the coming recession.
Figures released last week estimate growth for next year down to 1*3 per cent.
But economy secretary Jean Daniel Gerber has more to be cheery about than most of his colleagues around Europe, and indeed the world.
Of all the places in the world, this was supposed to be the safest to stash your wealth during times of calamity, war and financial panic. But here in the heart of Zurich's financial district, anxious Swiss investors have been lining up to watch the stock tickers in front of the headquarters of UBS, a financial behemoth that has written off a stunning $43 billion in loser investments since 2007, more than any other bank in Europe. "The idea that this could happen in Switzerland is unbelievable," said Klaus Stoeckli, 55, a food-products salesman who has withdrawn about $90,000 in investments from UBS, worried that its storied vaults might not be able to protect his money from the global credit crisis... While UBS is the largest bank in Switzerland, it's not the only giant affected by the credit crisis whose sheer size looms over the Swiss economy. One block away on the Bahnhofstrasse, Zurich's main street for high finance and luxury shopping, is the headquarters of Credit Suisse, with $1.1 trillion in assets. Though Credit Suisse has also suffered in the past year, it has not been hit as hard as UBS, its longtime rival... Gabrielle Radler, a retired schoolteacher from Zurich, said she withdrew most of her deposits from UBS, saying that the bank has become too risky and too large. "If things really collapsed, I don't think Switzerland could do anything," she said. "The population is too small, and the bank is just too big."
But here in the heart of Zurich's financial district, anxious Swiss investors have been lining up to watch the stock tickers in front of the headquarters of UBS, a financial behemoth that has written off a stunning $43 billion in loser investments since 2007, more than any other bank in Europe.
"The idea that this could happen in Switzerland is unbelievable," said Klaus Stoeckli, 55, a food-products salesman who has withdrawn about $90,000 in investments from UBS, worried that its storied vaults might not be able to protect his money from the global credit crisis...
While UBS is the largest bank in Switzerland, it's not the only giant affected by the credit crisis whose sheer size looms over the Swiss economy. One block away on the Bahnhofstrasse, Zurich's main street for high finance and luxury shopping, is the headquarters of Credit Suisse, with $1.1 trillion in assets. Though Credit Suisse has also suffered in the past year, it has not been hit as hard as UBS, its longtime rival...
Gabrielle Radler, a retired schoolteacher from Zurich, said she withdrew most of her deposits from UBS, saying that the bank has become too risky and too large. "If things really collapsed, I don't think Switzerland could do anything," she said. "The population is too small, and the bank is just too big."
(says the French guy) In the long run, we're all dead. John Maynard Keynes
Swiss banks in major rescue package Switzerland on Thursday joined the list of countries taking unprecedented measures to strengthen their banks with the government taking an indirect SFr6bn (US$5.3bn) stake in UBS and Credit Suisse raising SFr10bn from private investors and the Qatar Investment Authority. UBS, one of the largest casualties of the US credit crisis, would also transfer $60bn -- the overwhelming majority -- of its illiquid US securities to a new entity owned and controlled by the Swiss National Bank.
Switzerland on Thursday joined the list of countries taking unprecedented measures to strengthen their banks with the government taking an indirect SFr6bn (US$5.3bn) stake in UBS and Credit Suisse raising SFr10bn from private investors and the Qatar Investment Authority.
UBS, one of the largest casualties of the US credit crisis, would also transfer $60bn -- the overwhelming majority -- of its illiquid US securities to a new entity owned and controlled by the Swiss National Bank.
With Iceland's economy frozen by the global financial crisis, the tiny Nordic country continues to explore options for recovery, turning to the IMF, Russia and the EU for help. Under a currency swap agreement, Iceland on Tuesday, Oct. 14, secured 200 million euros ($270 million) from each of the central banks in neighboring Norway and Denmark, but talks to secure a much larger loan from Russia continued. Icelandic officials arrived in Moscow on Tuesday for talks, though Geir Haarde, Iceland's prime minister said the size of any loan from Russia had not been decided. "We look at this as a non-political deal, if there is to be a deal," he said. "I don't know of any particular political strings that the Russians would want to attach to this." On a third front, Iceland is also in discussions with the International Monetary Fund (IMF), though Haarde said the country has not formally requested a loan. If it does, it would become the first western European country to turn to the IMF since 1976.
Under a currency swap agreement, Iceland on Tuesday, Oct. 14, secured 200 million euros ($270 million) from each of the central banks in neighboring Norway and Denmark, but talks to secure a much larger loan from Russia continued. Icelandic officials arrived in Moscow on Tuesday for talks, though Geir Haarde, Iceland's prime minister said the size of any loan from Russia had not been decided.
"We look at this as a non-political deal, if there is to be a deal," he said. "I don't know of any particular political strings that the Russians would want to attach to this."
On a third front, Iceland is also in discussions with the International Monetary Fund (IMF), though Haarde said the country has not formally requested a loan. If it does, it would become the first western European country to turn to the IMF since 1976.
The European Commission has proposed lifting the minimum state guarantee on bank deposits to 100,000 euros ($136,760; £77,760) within a year. The proposal is one of several due to be tabled at a summit in Brussels where EU leaders are to discuss a multi-billion-euro financial rescue scheme. EU ministers already committed last week to raising the guarantee level to 50,000 euros. But the cost of the latest proposal is likely to concern smaller EU countries. EU Internal Markets and Services Commissioner Charlie McCreevy said increasing the minimum protection by next year would "strengthen Europeans' confidence in the safety of their deposits".
The European Commission has proposed lifting the minimum state guarantee on bank deposits to 100,000 euros ($136,760; £77,760) within a year.
The proposal is one of several due to be tabled at a summit in Brussels where EU leaders are to discuss a multi-billion-euro financial rescue scheme.
EU ministers already committed last week to raising the guarantee level to 50,000 euros.
But the cost of the latest proposal is likely to concern smaller EU countries.
EU Internal Markets and Services Commissioner Charlie McCreevy said increasing the minimum protection by next year would "strengthen Europeans' confidence in the safety of their deposits".
The only people protected by the higher ceilings are the upper middle class or the rich that haven't bothered to diversify by having accounts in more than one bank... a few percent of the population at most. In the long run, we're all dead. John Maynard Keynes
Plus, when you get that kind of money, you have countless cabinets calling you to sell you investment devices. You'd have to be determined to leave everything in the same place.
So, I know several hundreds of people. I am pretty sure that I don't know anyone who has deposits over the €70000 French limit in one bank. I'm not sure I know someone with so much in deposits at all. "The womb that spawned that thing is fertile yet"
PARIS: Stocks fell Wednesday in Europe following a mixed session in Asia, as investors began to face the likelihood that serious dislocations will plague the global economy even if the coordinated bailouts announced this week succeed in restoring confidence to credit markets. Investors were also watching a meeting in Brussels of leaders of the 27 European Union countries, who were meeting Wednesday to decide the details of the big bank rescues announced Sunday and Monday. Gordon Brown, the British prime minister, has called for the overhaul of the global financial system and the creation of "a new Bretton Woods," the agreement that established the financial institutions of the post-World War II era. Espen Furnes, a fund manager at Storebrand Asset Management in Oslo, said that there was concern about European economies softening. But despite the weak showing Wednesday, the market mood remained fundamentally one of relief, as "people are hopeful that the bailouts are going to make a big difference," Furnes said.
PARIS: Stocks fell Wednesday in Europe following a mixed session in Asia, as investors began to face the likelihood that serious dislocations will plague the global economy even if the coordinated bailouts announced this week succeed in restoring confidence to credit markets.
Investors were also watching a meeting in Brussels of leaders of the 27 European Union countries, who were meeting Wednesday to decide the details of the big bank rescues announced Sunday and Monday.
Gordon Brown, the British prime minister, has called for the overhaul of the global financial system and the creation of "a new Bretton Woods," the agreement that established the financial institutions of the post-World War II era.
Espen Furnes, a fund manager at Storebrand Asset Management in Oslo, said that there was concern about European economies softening. But despite the weak showing Wednesday, the market mood remained fundamentally one of relief, as "people are hopeful that the bailouts are going to make a big difference," Furnes said.
In a speech before parliament, German Chancellor Angela Merkel on Thursday made the case for a planned €500 billion financial system bailout. Meanwhile, the EU moved to ease accounting rules for banks and German politicians sought to cut a deal with Iceland over frozen deposits. Chancellor Angela Merkel sought the support of parliament on Wednesday for her government's €500 billion ($683 billion) rescue plan for the German financial system. In a speech before the Bundestag, Merkel said the global economy is currently experiencing its most serious test since the worldwide financial crisis of the 1920s and 30s. In recent weeks, interbank lending markets have been practically paralyzed and sinking stock prices have threatened to plunge into a "calamitous downward spiral," Merkel said. German Finance Minister Peer Steinbrück and German Chancellor Angela Merkel (right): "If the world financial markets are burning, the fire must be put out." Merkel, who heads the conservative Christian Democrats (CDU), said that urgently needed trust between players in the financial markets continues to erode and that few institutions are prepared to lend each other money. The mutual distrust, she said, "has almost completely paralyzed all the actors, with incalculable consequences for economic growth and jobs." In a situation like this, she said, the international community must come up with a joint response, and that this had happened. On Monday, she noted, several governments agreed to a coordinated response with comprehensive measures.
In a speech before parliament, German Chancellor Angela Merkel on Thursday made the case for a planned €500 billion financial system bailout. Meanwhile, the EU moved to ease accounting rules for banks and German politicians sought to cut a deal with Iceland over frozen deposits.
Chancellor Angela Merkel sought the support of parliament on Wednesday for her government's €500 billion ($683 billion) rescue plan for the German financial system. In a speech before the Bundestag, Merkel said the global economy is currently experiencing its most serious test since the worldwide financial crisis of the 1920s and 30s. In recent weeks, interbank lending markets have been practically paralyzed and sinking stock prices have threatened to plunge into a "calamitous downward spiral," Merkel said.
German Finance Minister Peer Steinbrück and German Chancellor Angela Merkel (right): "If the world financial markets are burning, the fire must be put out."
Merkel, who heads the conservative Christian Democrats (CDU), said that urgently needed trust between players in the financial markets continues to erode and that few institutions are prepared to lend each other money. The mutual distrust, she said, "has almost completely paralyzed all the actors, with incalculable consequences for economic growth and jobs."
In a situation like this, she said, the international community must come up with a joint response, and that this had happened. On Monday, she noted, several governments agreed to a coordinated response with comprehensive measures.
The Archbishop of Canterbury has called for more "just" rates of interest as he blamed greed for the global financial crisis. Dr Rowan Williams said Christians and Muslims should work together to decide what might constitute a fairer system of borrowing, and suggested an alternative to the current banking system.It comes just weeks after he called for tighter regulation of the stock markets to prevent a repeat of the excesses of recent years, and claimed Karl Marx was correct to warn of the power of "unbridled capitalism" over workers.Speaking at the end of the biggest ever conference in Britain devoted to improving understanding between the two faiths, Dr Williams acknowledged that while Islam still forbids the charging of interest, Christian leaders watered down their opposition to the practice centuries ago.
Dr Rowan Williams said Christians and Muslims should work together to decide what might constitute a fairer system of borrowing, and suggested an alternative to the current banking system.
It comes just weeks after he called for tighter regulation of the stock markets to prevent a repeat of the excesses of recent years, and claimed Karl Marx was correct to warn of the power of "unbridled capitalism" over workers.
Speaking at the end of the biggest ever conference in Britain devoted to improving understanding between the two faiths, Dr Williams acknowledged that while Islam still forbids the charging of interest, Christian leaders watered down their opposition to the practice centuries ago.
The leaders of South Africa, Brazil and India today blamed Western "speculators" for creating the financial crisis that endangered the development of the world's emerging economies - and called for reform of the institutions of global governance to reflect their growing economic clout. At a summit in the Indian capital, the three countries said they were reeling from the credit crunch - which they blamed on the mistakes and greed of the wealthier world. "We run the risk of being victims of a financial crisis generated by rich countries. This is unjust," said Brazilian President Luiz Inácio Lula da Silva. "It is inadmissible that we'll pay for the irresponsibility of speculators that transformed the world into a gigantic casino. At the same time they gave us lessons on how we should govern our countries."
At a summit in the Indian capital, the three countries said they were reeling from the credit crunch - which they blamed on the mistakes and greed of the wealthier world. "We run the risk of being victims of a financial crisis generated by rich countries. This is unjust," said Brazilian President Luiz Inácio Lula da Silva.
"It is inadmissible that we'll pay for the irresponsibility of speculators that transformed the world into a gigantic casino. At the same time they gave us lessons on how we should govern our countries."
The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left. The chairman of JPMorgan Chase, Jamie Dimon, was receptive, saying he thought the deal looked pretty good once he ran the numbers through his head. The chairman of Wells Fargo, Richard M. Kovacevich, protested strongly that, unlike his New York rivals, his bank was not in trouble because of investments in exotic mortgages, and did not need a bailout, according to people briefed on the meeting. But by 6:30, all nine chief executives had signed -- setting in motion the largest government intervention in the American banking system since the Depression and retreating from the rescue plan Mr. Paulson had fought so hard to get through Congress only two weeks earlier. What happened during those three and a half hours is a story of high drama and brief conflict, followed by acquiescence by the bankers, who felt they had little choice but to go along with the Treasury plan to inject $250 billion of capital into thousands of banks -- starting with theirs.
The chairman of JPMorgan Chase, Jamie Dimon, was receptive, saying he thought the deal looked pretty good once he ran the numbers through his head. The chairman of Wells Fargo, Richard M. Kovacevich, protested strongly that, unlike his New York rivals, his bank was not in trouble because of investments in exotic mortgages, and did not need a bailout, according to people briefed on the meeting.
But by 6:30, all nine chief executives had signed -- setting in motion the largest government intervention in the American banking system since the Depression and retreating from the rescue plan Mr. Paulson had fought so hard to get through Congress only two weeks earlier.
What happened during those three and a half hours is a story of high drama and brief conflict, followed by acquiescence by the bankers, who felt they had little choice but to go along with the Treasury plan to inject $250 billion of capital into thousands of banks -- starting with theirs.
A few other choice quotes:
The terms, officials said, were devised so as not to be punitive. The rising dividend and the warrants are meant to give banks an incentive to raise private capital and buy out the government after a few years. Still, it took some cajoling... If we let executive compensation block this, "we are out of our minds," he said, according to a person briefed on the meeting... As they heard more of the details, some of the bankers began to realize how attractive the program was for them.
If we let executive compensation block this, "we are out of our minds," he said, according to a person briefed on the meeting...
As they heard more of the details, some of the bankers began to realize how attractive the program was for them.
Goldman Sachs Group Inc.'s Lloyd Blankfein, whose $70.3 million paycheck made him Wall Street's most highly compensated chief executive officer last year, could still earn tens of millions annually under the bank-rescue plan run by his former boss, Treasury Secretary Henry Paulson. Executive-pay packages will be restricted for the nine banks receiving a $125 billion infusion of U.S. funds to restart lending, said Paulson, who earned $37.8 million in 2005, his last full year as Goldman's CEO. The investment is part of a $700 billion bailout plan approved by Congress this month. Blankfein, 54, was Wall Street's best-paid CEO in 2007, according to data compiled by Bloomberg. He ``could still make tens of millions of dollars if he continues to receive stock grants and Goldman's stock rises,'' said David Schmidt, a senior consultant for New York-based compensation firm James F. Reda & Associates.
Executive-pay packages will be restricted for the nine banks receiving a $125 billion infusion of U.S. funds to restart lending, said Paulson, who earned $37.8 million in 2005, his last full year as Goldman's CEO. The investment is part of a $700 billion bailout plan approved by Congress this month.
Blankfein, 54, was Wall Street's best-paid CEO in 2007, according to data compiled by Bloomberg. He ``could still make tens of millions of dollars if he continues to receive stock grants and Goldman's stock rises,'' said David Schmidt, a senior consultant for New York-based compensation firm James F. Reda & Associates.
Ka-ching on the tax payers dime.
Goldman-Sachs executive selling 5.9 acres on Nantucket for $55 million Co-chief operating officer and co-president of Goldman Sachs Group, Inc. Jon Winkelried is reportedly offering his 5.9 acres of Nantucket property on two lots on the Monomoy waterfront for the asking price of $55 million. A memo obtained by The Nantucket Independent, which was sent to all Nantucket Association of Real Estate Brokers members on Oct. 7 from Congdon & Coleman Real Estate broker Linda Bellevue, Winkelried's listing agent, with an aerial photo of the two lots, confirmed that the property is for sale. Sources close to The Nantucket Independent confirmed the asking price as $55 million and that the property is being offered for sale privately and not being listed with all NAREB members. Bellevue said she signed a confidentiality agreement with her client and would neither confirm the asking price nor the name of her client. She said her client was a very private person. Winkelried's property consists of 1.7 acres at 11 Cathcart Road currently assessed at $4,817,600, which, according the Town of Nantucket's Tax Assessor's office, Winkleried purchased for $1,950,000 on Sept. 10, 1999 and 4.18 acres at 15 Cathcart Road now valued at $20,592,800 that he bought for $5,000,000 on Jan. 4, 1999. Winkelried, Goldman Sachs' COO and co-president since 2006, earned $53.1 million in 2006 and is listed eighth out of the 25 highest paid men in the country by Fortune Magazine in its 2007 25 Highest Paid Men listing.
Co-chief operating officer and co-president of Goldman Sachs Group, Inc. Jon Winkelried is reportedly offering his 5.9 acres of Nantucket property on two lots on the Monomoy waterfront for the asking price of $55 million.
A memo obtained by The Nantucket Independent, which was sent to all Nantucket Association of Real Estate Brokers members on Oct. 7 from Congdon & Coleman Real Estate broker Linda Bellevue, Winkelried's listing agent, with an aerial photo of the two lots, confirmed that the property is for sale.
Sources close to The Nantucket Independent confirmed the asking price as $55 million and that the property is being offered for sale privately and not being listed with all NAREB members.
Bellevue said she signed a confidentiality agreement with her client and would neither confirm the asking price nor the name of her client. She said her client was a very private person.
Winkelried's property consists of 1.7 acres at 11 Cathcart Road currently assessed at $4,817,600, which, according the Town of Nantucket's Tax Assessor's office, Winkleried purchased for $1,950,000 on Sept. 10, 1999 and 4.18 acres at 15 Cathcart Road now valued at $20,592,800 that he bought for $5,000,000 on Jan. 4, 1999.
Winkelried, Goldman Sachs' COO and co-president since 2006, earned $53.1 million in 2006 and is listed eighth out of the 25 highest paid men in the country by Fortune Magazine in its 2007 25 Highest Paid Men listing.
The Federal Reserve may subsidize U.S. companies by buying their short-term debt at rates below those demanded by private investors in the $1.6 trillion commercial-paper market. Fed officials yesterday set the yield they will pay for commercial paper at about 1.1 percentage points less than the average cost for financial companies, weekly central bank data show. Policy makers last week announced emergency plans to buy the securities after the market shrank to a three-year low. The discount cuts the cost of cash to 2.1 percent from 3.85 percent for General Electric Co.'s financing arm and from 4.6 percent for Citigroup Inc., data compiled by Bloomberg show. One possible unintended consequence: private buyers are shut out. ``The Fed can drive everybody else out of the market'' for buying commercial paper unless market yields drop, said Robert Eisenbeis, chief monetary economist at hedge fund Cumberland Advisors Inc. in Vineland, New Jersey, who used to work at the Atlanta Fed. That could end up ``assuring that markets won't restart,'' he said.
Fed officials yesterday set the yield they will pay for commercial paper at about 1.1 percentage points less than the average cost for financial companies, weekly central bank data show. Policy makers last week announced emergency plans to buy the securities after the market shrank to a three-year low.
The discount cuts the cost of cash to 2.1 percent from 3.85 percent for General Electric Co.'s financing arm and from 4.6 percent for Citigroup Inc., data compiled by Bloomberg show. One possible unintended consequence: private buyers are shut out.
``The Fed can drive everybody else out of the market'' for buying commercial paper unless market yields drop, said Robert Eisenbeis, chief monetary economist at hedge fund Cumberland Advisors Inc. in Vineland, New Jersey, who used to work at the Atlanta Fed. That could end up ``assuring that markets won't restart,'' he said.
A global financial crisis of the current magnitude is unique. But two historic events offer lessons for a way out, say economists. First, move with alacrity. During the Great Depression a protracted delay in aiding banks proved fatal - a lesson Britain and now, this week, the United States have taken on. Second, coordinate globally. The Bretton Woods agreement near the end of World War II became an effective tool for reworking a shattered world economy. Calls for a second Bretton Woods are now being sounded by such figures as Britain's Prime Minster Gordon Brown, French President Nicolas Sarkozy, and World Bank president Robert Zoellick. Central to European leaders discussions Wednesday and Thursday in Brussels is this motto: A global crisis requires a global solution. The subtext is that much tougher regulation is required. As Mr. Brown put it Monday, "Sometimes it takes a crisis for people to agree that what is obvious and should have been done years ago can no longer be postponed. We must create a new international financial architecture for the global age." The storied 1944 Bretton Woods conference - where some 700 delegates from 44 nations gathered at a hotel in New Hampshire - was a bold move to create the first negotiated monetary system among industrial states. The World Bank and the 185-nation International Monetary Fund emerged from that pact. The IMF has become a major source of loans for developing nations in financial trouble. The legacy of Bretton Woods, said Mr. Zoellick in a speech this week, was that the crisis of a ravaged world created a commitment to remake institutions, to "turn the problems of an era into an opportunity."
First, move with alacrity. During the Great Depression a protracted delay in aiding banks proved fatal - a lesson Britain and now, this week, the United States have taken on. Second, coordinate globally. The Bretton Woods agreement near the end of World War II became an effective tool for reworking a shattered world economy. Calls for a second Bretton Woods are now being sounded by such figures as Britain's Prime Minster Gordon Brown, French President Nicolas Sarkozy, and World Bank president Robert Zoellick.
Central to European leaders discussions Wednesday and Thursday in Brussels is this motto: A global crisis requires a global solution. The subtext is that much tougher regulation is required. As Mr. Brown put it Monday, "Sometimes it takes a crisis for people to agree that what is obvious and should have been done years ago can no longer be postponed. We must create a new international financial architecture for the global age."
The storied 1944 Bretton Woods conference - where some 700 delegates from 44 nations gathered at a hotel in New Hampshire - was a bold move to create the first negotiated monetary system among industrial states. The World Bank and the 185-nation International Monetary Fund emerged from that pact. The IMF has become a major source of loans for developing nations in financial trouble.
The legacy of Bretton Woods, said Mr. Zoellick in a speech this week, was that the crisis of a ravaged world created a commitment to remake institutions, to "turn the problems of an era into an opportunity."
When neocons use the word "opportunity", I immediate think of shock doctrine.
Oslo/Reykjavik - Iceland should consider replacing its currency with that of neighbouring Norway, an Icelandic economics professor suggested in an interview published Wednesday. The move was necessary since confidence in the Icelandic central bank has withered in the wake of the recent financial turmoil, Professor Thorolfur Matthiasson of the economics faculty at the University of Iceland told the Bergens Tidende newspaper. "To get room to maneuver we need a plan A and a plan B," Matthiasson said, noting that one option was to consider joining the European Union and adopting the joint European currency, the euro. "In the short-term, it may be more realistic to pursue a monetary union with Norway," he added. Both Norway and Iceland are members of the European Economic Area (EEA) that cooperates with the 27-nation bloc, and have sizeable energy resources and fisheries, Matthiasson noted. (...) The Icelandic central bank on Tuesday opted to draw on swap facilities with the central banks of Denmark and Norway, totalling 400 million euros (543 million dollars). The loans were under the auspices of a May agreement secured with the central banks of Sweden, Norway and Denmark.
"To get room to maneuver we need a plan A and a plan B," Matthiasson said, noting that one option was to consider joining the European Union and adopting the joint European currency, the euro. "In the short-term, it may be more realistic to pursue a monetary union with Norway," he added.
Both Norway and Iceland are members of the European Economic Area (EEA) that cooperates with the 27-nation bloc, and have sizeable energy resources and fisheries, Matthiasson noted.
(...)
The Icelandic central bank on Tuesday opted to draw on swap facilities with the central banks of Denmark and Norway, totalling 400 million euros (543 million dollars).
The loans were under the auspices of a May agreement secured with the central banks of Sweden, Norway and Denmark.
