At the May 2009 Aspen Seminars for Leaders, leading representatives from financial institutions and public authorities discussed the financial crisis and the emerging challenges in the structure and dynamics of international financial markets.
The financial markets are in great difficulty and the world economy is going through troubled times. The current crisis has brought about profound social and cultural change. Never in the past have people and nations with histories and cultures so diverse expressed the same desire for certainty and called for a shared system of rules.
The breakfast meeting got underway with an identification of the long-term challenges that the economic crisis poses to the West. It was noted that the last twenty years have been marked by momentous changes. In the 1990s, the various areas of the world became increasingly interdependent. As a result, the last ten years have seen the highest global GDP growth ever recorded, fueled mainly by the US deficit and Chinese exports. However, the scale of this financial and trade imbalance cannot support future growth.
Created by the implosion of the US financial system, the last of the “bubbles” – that of the housing market – is the culmination of over a decade of shortsighted American monetary policies and an inadequate monitoring system. The situation is particularly grave, with forecasts that world growth will fall from 5% in 2007 to little more than 1% in 2009. As yet, it is not possible to predict how long the recession will last.
The Conference discussion focused on the overall international scenario that may emerge after the worst of the economic crisis has passed. A fundamental question arises concerning the nature of the restructure currently in progress. Does it represent a new paradigm for global capitalism or, less ambitiously, is it just a partial reorganization based on more cautious attitudes and expectations?
The participants at this roundtable were deeply critical of the lack of transparency in the international financial system, the product of an out-of-control laissez-faire capitalism and a global lex mercatoria that has swept aside traditional capitalist organizational forms and the regulatory functions of public authorities.
