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Treasury has notified the banks that it believes need more capital, but it has delayed releasing that information to the public and hasn't even fully disclosed its stress test criteria. The stress test approach depends to some extent on public disclosure moving banks to absorb losses and recapitalize, but there is the countervailing risk that full disclosure will foment a panic. Is there a way out of this quandary that makes good practical and economic sense?
-- John Maggs, NationalJournal.com
Economists are starting to debate the shape of a recovery -- will it be a "V" or an "L?" What do you make of the evidence garnered by Michael Mussa for a stronger-than-average surge of growth when the recovery starts, or the case made by Paul Krugman, Simon Johnson and others that a sluggish, "L"-shaped rebound is likely, or perhaps even a double-dip "W?" Is it simply too early to see a turning point in the near future?
-- John Maggs, NationalJournal.com
4 responses: Norbert Walter, Jean Pisani-Ferry, Adam Posen, J.D. Foster
Many have read and most have heard about Simon Johnson's controversial piece in the Atlantic, which argues that the current financial crisis, and the government's response so far, is a classic case of regulatory capture. Johnson, former chief economist at the International Monetary Fund, implies IMF-like conditions on political reform will be needed before the United States comes to grips with the crisis and takes effective action to end it. Is he right in the diagnosis, and right in the proposed cure? Is it possible to effect such changes in time to matter?
-- John Maggs, NationalJournal.com
4 responses: Adam Posen, Gary Burtless, Nicolas Véron, Jeffrey Frankel
Will the London G-20 summit be remembered as a turning point for the world economy, as merely having stemmed the bleeding, or as having failed to deliver what is needed in the face of the worst economic downturn since the Great Depression? What are some of the specific benefits to flow from the London meeting, and what were its principal shortcomings?
-- Bruce Stokes, NationalJournal.com
5 responses: Norbert Walter, Jeffrey Frankel, Nicolas Véron, Guy de Jonquières, Jean Pisani-Ferry
