In The News

Irrational Exuberance to Bust: Financial Bubbles Demand Regulation

Kemal Dervis April 23, 2008
As the financial sector has gained dominance in the world economy, some investors have become accustomed to steady growth and double-digit profits. While the financial industry rewards efficiency and innovation among competing firms, the relentless quest for profits and a short-term mentality in some finance circles have contributed to a series of asset bubbles: the Asian-Russia financial crisis...

Housing Woes in US Spread Around Globe

Mark Landler April 22, 2008
Housing prices are dropping around the globe like dominoes – and some analysts fear an extended downturn could result in economic collapse. Countries and regions with the highest prices, including Ireland and other European nations, have the most to lose, reports Mark Landler in the New York Times. Residential investment accounts for 4 percent of the US economy versus 12 percent of the Irish...

Paulson Financial Regulation Reform Plan Already Faces Discounting

April 4, 2008
The mortgage-backed securities crisis has resulted in turmoil in the global markets, but politics could get in the way of any quick fixes of the US financial system, reports Thomson Financial News. Three short-term recommendations in the proposal from Treasury Secretary Henry Paulson include expanding a presidential working group on the financial markets; establishing a federal commission to...

Weak Dollar Feels New Stress

Joanna Slater March 12, 2008
Most countries around the world are fighting a trend of global inflation by tightening their currencies, allowing the values to rise. That places pressure on a declining US dollar, writes Joanna Slater for the Wall Street Journal. A declining dollar contributes to rising prices for raw materials like oil, which in turn contributes to inflation. “The inflation dilemma is at its most stark in...

It's the Dollar, Stupid

Judy Shelton March 6, 2008
As many in the US fret about a failing economy, other countries express specific concern about a falling dollar. The US dollar is the world’s key reserve currency and yet US leaders limit their focus on domestic policy, shrugging about global worries, explains author Judy Shelton, in an opinion essay for the Wall Street Journal. She offers a reminder that currency woes contributed to the Great...

Brave New Economy

David Hale February 27, 2008
The Asian financial crisis 10 years ago convinced many governments on the continent to become big, yet cautious savers. Developing nations account for 75 percent of the world’s $6 trillion of foreign exchange reserves – and have sovereign funds worth $2.5 trillion. By purchasing vast sums of US treasury bonds and other debt, Asian and Middle Eastern investors contributed to low interest rates in...

Why Spanish Banks Seem Immune to the Subprime Virus

February 20, 2008
The subprime crisis that originated in the US – with lenders giving out mortgages to many people who could not afford future payments – has begun to weaken European banks as well. Credit-rating agencies assured investors that US mortgages were a safe investment, and banks purchased securities packages that included problem loans. As prices for homes in the US market fall and homeowners struggle...