Abstract
Globalization is an ever-increasing interdependence between countries in their trading and financial operations and systems. It has also meant for some time now — as swiftly became apparent in the autumn of 2008 — that the national banking authorities of individual countries have lost their ability to control and contain the effects of failure and fallout in financial globalization. National bank bailouts simply cannot cover the full scale of capital losses incurred from profligate lending; nor can they put effective limits on future contingent liabilities for taxpayers. The IMF and World Bank and the European Bank for Reconstruction and Development are not designed to deal with this eventuality, nor do they yet have the capacity to do so. There has thus been a chronic disjunction in the provision of credit as the lifeblood of businesses, since the very capital ratios and reserve requirements that enabled banks to lend prudently have been swept away by the avalanche of bad debt.
The move from self-regulating capitalism to financial socialism is only a step.
(Attributed to Russian President Dimitry Medvedev)
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© 2010 Alex Mackinnon and Barnaby Powell
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Mackinnon, A., Powell, B. (2010). Second Sight. In: China Counting. Palgrave Macmillan, London. https://doi.org/10.1057/9780230251038_16
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DOI: https://doi.org/10.1057/9780230251038_16
Publisher Name: Palgrave Macmillan, London
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