The U.S. Financial Crisis: The Global Dimension with Implications for U.S. Policy
"...The process for coping with the crisis by countries across the globe has been
manifest in four basic phases. The first has been intervention to contain the
contagion and restore confidence in the system. This has required extraordinary
measures both in scope, cost, and extent of government reach. The second has been
coping with the secondary effects of the crisis, particularly the slowdown in
economic activity and flight of capital from countries in emerging markets and
elsewhere who have been affected by the crisis. The third phase of this process is to
make changes in the financial system to reduce risk and prevent future crises. In
order to give these proposals political backing, world leaders have called for
international meetings to address changes in policy, regulations, oversight, and
enforcement. Some are characterizing these meetings as Bretton Woods II. On
November 15, 2008, a G-20 leaders’ summit recommended several measures to be
implemented by participating countries by March 31, 2009. The fourth phase of the
process is dealing with political and social effects of the financial turmoil."