In The News

Mortgages May Be Toxic, But US Treasuries Appear a Safe Haven

Ashok Bardhan December 16, 2008
While the US financial markets were the source behind global credit calamity and still present tremendous uncertainty, foreign investors continue to demonstrate trust in US government institutions by increasing investments in US Treasuries. That trust gives policymakers time and space to work on significant imbalances in the areas of currency exchange rates, deficits and trade, explains Berkeley...

Switzerland Pays Price for Isolationism

Joshua Gallu December 5, 2008
Switzerland has long been known as “a custodian of the world’s wealth,” but the recent credit crunch has hit all banks hard and Swiss policies of isolation have not made the nation immune against effects of the economic downturn. The Swiss franc is losing value to the dollar, and the Swiss economy is expected to contract. Swiss bank UBS faced the biggest losses in Europe and had to be aided with...

Financial Crisis Belies Myth of US Independence

Edward Goldberg October 30, 2008
Countries make the mistake of assuming that they can pick their way through globalization – that they can block products from other countries yet sell in those markets, or set rules for others to follow while intending to ignore those same rules at home. No community or country, as economic units, can escape financial decisions made thousands of miles away, argues Edward Goldberg, international...

How Can We Preempt Investment Protectionism?

Ernesto Zedillo October 23, 2008
Nations laden with debt fret about investments by overseas cash-rich sovereign wealth funds. “The most common fears are that the SWFs, being government-owned, may be used not only for the purpose of receiving attractive returns on their investments but also for pursuing geopolitical objectives, gaining control of strategic natural resources or extracting sensitive technologies; that they could...

Icelandic Shoppers Splurge as Currency Woes Reduce Food Imports

Chad Thomas October 14, 2008
Three major Icelandic banks have collapsed, raising uncertainty about Iceland’s currency and ability to repay loans. Inventories of goods, including food and clothing, are shrinking. The island nation must import most food and other products, while the “government has asked banks to prioritize foreign currency transactions for essentials such as food, drugs and oil,” explains Chad Thomas,...

Globalizing the Crisis Response

C. Fred Bergsten October 13, 2008
Regulation of finance has long been a responsibility for nations, but with the current global crisis, governments quickly learned they cannot escape a global credit freeze. Banks struggle to survive, some nations are already in recession and developing countries can anticipate reduced exports and problems ahead. The global nature of the crisis calls out for a global response, argue C. Fred...

Global Crisis: How Far to Go? Part II

Manu Bhaskaran October 10, 2008
Speed of transportation and communication that characterize today’s global supply chain requires trust and flow of credit along the many steps: But now consumers worry about the future of their jobs, retailers and manufacturers worry about sales, suppliers worry about orders and lenders clutch to their reserves of cash. In the second article of the YaleGlobal series addressing the repercussions...