Over the past decade, Chinese trade revenues, savings and purchases of US debt increased. Low interest rates encouraged US consumers to spend and housing prices soared. But such imbalances could not be sustained and financial instruments containing mortgages for homes that have lost their value, have proven toxic for the world. Economists and central bankers are still struggling to find a way out of the subprime mortgage crisis. If Japan’s lost decade offers lessons, then deflation must be averted at all costs if there is to be hope for a recovery.. But for the long-run, one magical phrase emerges from experts and that’s “stricter regulations for the banking industry.” Once governments succeed in restoring consumer and investor confidence, they should focus on designing regulations that encourage responsibility and a long-term outlook. Furthermore, policymakers have to recognize the need for global oversight of the banking industry, either by strengthening existing institutions or by creating new international authorities. The timing of the rescue is uncertain, and the certainty of its efficacy remains in question. To put the matter in historical perspective, there is still no consensus on whether government spending policies of Franklin D. Roosevelt or increased demand for goods created by Second World War pulled the United States out of the Great Depression. One certainty for this crisis: there are no localized solutions for a problem that extends throughout the world.

The Trans-Pacific Free-Trade Charade

Governments may be giving up ability to regulate corporations on environmental and health protections
Joseph E. Stiglitz and Adam S. Hersh
October 8, 2015

US, Japan and 10 Countries Strike Pacific Trade Deal

Each nation's legislators must now approve
Shawn Donnan and Demetri Sevastopulo
October 6, 2015

Xi-Obama Summit: Bridging the Trust Deficit in US-China Ties?

China and the US face many complex issues; the challenge is not letting one overwhelm the relationship
Robert A. Manning
September 29, 2015

Crunchtime for Global Tax-Avoidance Push

Businesses may dodge $200 billion in taxes annually by working with offshore financial hubs
Paul Hannon
September 29, 2015

Interest Rate Rise: Turning Point Looms for US Debt Binge

A hike in rates is inevitable; some analysts suggest it could encourage more responsible borrowing
Eric Platt
September 9, 2015

Globalization at Warp Speed

International markets increasingly dictate terms for investors, companies and nations
Robert J. Samuelson
September 7, 2015

Central Bank Interventions: Drunks Searching by the Light

Monetary policies may be too loose from countries with aging populations
Chan Akya
August 28, 2015