In the last year, we have already seen some investors pull money out of emerging markets in response to a stronger dollar, rising U.
During February and Marchmore than 25 subprime lenders filed for bankruptcy, which was enough to start the tide. By that time, central banks and governments around the world had started coming together to prevent further financial catastrophe.
And if recent trends continue, many low-income countries will face unsustainable debt burdens. By Manoj Singh Updated May 9, When the Wall Street evangelists started preaching "no bailout for you" before the collapse of British bank Northern Rock, they hardly knew that history would ultimately have the last laugh.
Declines Begin There were early signs of distress: byU. Support is waning for the open, rules-based international system that has fueled global prosperity, and trade tensions could escalate. But rate cuts and liquidity support in itself were not enough to stop such a widespread financial meltdown.
Northern Rock, a British bank, had to approach the Bank of England for emergency funding due to a liquidity problem. Advanced economies must ensure that prosperity is more widely shared, by dealing with rising inequality and stagnant wage growth. Global growth, while still strong, is leveling off.
Soon a big secondary market for originating and distributing subprime loans developed.
In a unanimous move, central banks of several countries resorted to coordinated action to provide liquidity support to financial institutions. The U.