FT video on credit crunch


I have just watched a video on FT website (view from Europe). Jean Lemierre, the president of EBRD, was talking about the global credit crunch and the effects on the banking region. He started off saying that this is a tricky time for the world economy. However, the banking system hasn’t yet seen a major impact in Europe. Banks now emerge with a strong model, by refinancing their mortgage business. EBRD is not able to finance them, since it is not a liquidity provider, but they can encourage banks with different policies.

Regarding inflation, it is a serious matter. For example in Ukraine. There is also the tension with Russia. We need to think about the social impact and market-minded reforms. The government, has of course a say in all these. It needs to pay attention to the price consumption to energy, maybe initiate energy saving programs! Also, governments should encourage food production and thereby exports, instead of placing trade barriers.

In terms of the new leadership in Russia, there is hope about improvements in the rule of law (referring directly to contracts).

There is also the issue of Turkey, regarding which Mr Lemierre mentions that a timeframe and process have been established and that good news are expected around September regarding Turkey’s application.

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