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more firepower to help emerging economies through the deleveraging period". monetary stability in their respective countries. But it more firepower to help emerging economies through would have heavy influence over them when it comes to __ the deleveraging period". following policies that are compatible with global growth and financial stability. For example, it would © A"NEW WORLD ORDER" IN BANKING work with key countries to better coordinate national Following the collapse of Bear Stearns, a Reuters stimulus programs when the world enters a recession, report of 17 March 2008 commented on a document as is happening now, so that the cumulative impact of | released by research firm CreditSights, saying that the various national efforts do not so dramatically —"[fJinancial firms face a ‘new world order'" and that overshoot that they plant the seeds for a crisis of global "[{mJore industry consolidation and acquisitions may inflation. This is a big threat as government spending follow after JPMorgan Chase & Co. ... said it was buying everywhere goes into overdrive." Bear Stearns..." Further, Reuters reported: "In the event On 10 January 2009, it was reported” that “one clear of future consolidation, potential acquirers identified by solution to avoid a repeat of the problems would be the —CreditSights include JPMorganChase, Wells Fargo, US establishment of a ‘global central bank'—with the IMF — Bancorp, Goldman Sachs and Bank of America..."” and World Bank being unable to prevent the financial On 9 June 2008, Timothy Geithner, as head of the meltdown". Dr William Overholt, a senior research Federal Reserve Bank of New York (before he was fellow at Harvard's Kennedy School and formerly with appointed Treasury Secretary in the Obama the RAND Institute, said in an administration), wrote an interview following a speech he . . article for the Financial Times gave at the Dubai School of The solutions that will following his attendance at the :" i . 2 Bil f . urn. eee | follow are simply the S08 2 ete onions manage global liq uidity. extensions of the current reported” that he wrote tha Theoretically that could be "{bJanks and investment banks achieved through some kind of system, only sped up whose health is crucial to the global central bank, or through through the necessity global financial system should the creation of a global operate under a_ unified currency, or through global posed by the current crisis. regulatory framework". He also acceptance of a set of rules with wrote that the US Federa sanctions and a _ dispute Reserve should play a "centra settlement mechanism." role" in this new regulatory framework, working closely Guillermo Calvo, Professor of Economics, — with supervisors in the US and around the world. nternational and Public Affairs at Columbia University, On 6 November 2008, The National, a prominent United wrote an article” for VOX, published on 23 March 2009. Arab Emirates newspaper, reported on Baron David de Calvo is a former Chief Economist of the Inter-American —__ Rothschild's travelling with UK Prime Minister Gordon Development Bank and a former Senior Advisor in the — Brown on a visit to the Middle East, although not as Research Department of the IMF. He is currently a “part of the official party" accompanying Brown. The Research Associate at the National Bureau of Economic _ report stated: "Baron Rothschild shares most people's Research (NBER) and President of the International view that there is a new world order. In his opinion, Economic Association. Calvo wrote: "Credit availability | banks will deleverage and there will be a new form of is not ensured by stricter financial regulation. In fact, it global governance.” can be counterproductive unless it is accompanied by On 24 February 2009, the Times Online ran an opinion he establishment of a lender of last resort (LOLR) that — piece with the headline "New world order in banking radically softens the severity of financial crisis by necessary...". The article, by Michael Lafferty, chairman providing timely credit lines. With that aim in mind, the _ of the International Retail Banking Council, stated that 20th century saw the creation of national or regional _“{iJt is increasingly evident that the world needs a new central banks in charge of a subset of the capital market. banking system and that it should not bear much t has now become apparent that the realm of existing resemblance to the one that has failed so central banks is very limited and the world has no _ spectacularly".” institution that fulfils the necessary global role. The But, of course, the ones that are shaping this new MF is moving in that direction, but it is still too small banking system are the champions of the previous and too limited to adequately do so." banking system. The solutions that will follow are The first proposal Calvo would like to make is "that — simply the extensions of the current system, only sped he topic of financial regulation should be discussed up through the necessity posed by the current crisis. together with the issue of a global lender of last resort". Further, he proposed that "international financial © ANEMERGING GLOBAL GOVERNMENT institutions must be quickly endowed with considerably An article in the Financial Post of 2 April 2009 stated: follow are simply the extensions of the current system, only sped up through the necessity posed by the current crisis. AN EMERGING GLOBAL GOVERNMENT An article in the Financial Post of 2 April 2009 stated: 20 ¢ NEXUS The solutions that will www.nexusmagazine.com AUGUST —- SEPTEMBER 2009