In The News

Wanted: Competent Leaders With Vision To Tackle Global Crises

Jeffrey E. Garten June 3, 2010
Markets around the globe analyze and quantify risk. But governance and politics present too much uncertainty, and investors are increasingly troubled by governments’ inability to address pressing problems and coordinate responses to problems including climate change, massive debt of any one country and other imbalances. Because of countless interconnections through labor, capital, environment,...

When Banks Don't Trust Banks

Pierre Paulden June 3, 2010
Trust breaks down in banking when investors question whether deposits are safe and when banks worry about loan repayment. Banks only keep a percentage of cash on hand, and a lack of trust can disrupt efficient lending and borrowing with that limited cash. Global banks could have a capital deficit of $1.5 trillion, by some reports, and troubled banks could request additional government assistance...

The Web of Globalization

Nayan Chanda May 24, 2010
Can a country withdraw from globalization, or for that matter, give up democracy in order to benefit from global capital flow? In this column, YaleGlobal editor Nayan Chanda dissects the recent argument offered by Harvard economist Dani Rodrik, who suggests that “economic globalization, political democracy, and the nation-state are mutually irreconcilable.” Crises that disrupt global capital...

Behind the Drama in Europe Lies a Global Crisis

Edmund Conway May 20, 2010
The debt crisis in Greece exposes challenges for lenders and borrowers throughout Europe – testing cooperation and governance on the continent. National governments disagree on many matters ranging from stricter regulations for hedge funds to a proposal requiring approval for national budgets from the European Commission. Politicians – seeking to maintain their hold on power – are wary of...

Fears Intensify That Euro Crisis Could Snowball

Nelson D. Schwartz, Eric Dash May 17, 2010
As Europe strives to bail out Greece and other nations in serious debt, global investors ponder the long-term effects of huge imbalances. The worry is that countries with massive debt like Spain and Portugal can weaken strongholds like Germany and France, reports an article in the New York Times. Economically strong countries that hold problem debt may be forced into restructuring plans even as...

Lessons From Athens

Nayan Chanda May 12, 2010
Carefree spending on borrowed funds is not sustainable. Europe could not handle fast assistance to debt-laden Greece on its own and had to turn to the International Monetary Fund for additional financial support. Eurozone nations and the IMF imposed stringent conditions, and future borrowing by the Greeks will carry heavy costs. “The same global liquidity that can fuel growth can also evaporate...

Renminbi Revaluation Won't Trigger a Shopping Spree

Zhiwu Chen May 12, 2010
Many economists and policy analysts maintain that resolving huge trade imbalances is easy – the Chinese government should just let the renminbi appreciate. But that quick fix won’t do much, contends Zhiwu Chen, professor of finance with the Yale School of Management. Revaluing the renminbi would shift manufacturing to other low-cost Asian nations, without spurring Chinese spending on US goods or...