FT.com: Financial institutions stare into the abyss


An illustration depicting the shaky situation of financial institutions

The world economy once again stands on a precipice. Finance ministers might want to look straight ahead, but investors are forcing them to peer down to the abyss.

As advanced economies slow sharply and emerging economies wonder whether inflation or recession is the greater threat, the need for finance ministers to find a way to achieve their ambition of “strong, stable and balanced” global growth has rarely been more urgent.

Christine Lagarde, the new managing director of the International Monetary Fund, has urged countries make necessary adjustments to restore confidence.

“I believe there is a path to recovery, much narrower than before, and getting narrower. To navigate it, we need strong political will across the world―leadership over brinkmanship, co-operation over competition, action over reaction,”

Could it be that it takes for the global economy to, once more, stand on the very brink of collapse before common sense prevails?

An institutional culture driven by Greed, Fear and Ego brought us to the edge and has been allowed to prevail as the people who created the problems were “trusted” to resolve them!

Trillions have been “wasted” on sustaining a false market, supporting failed Financial and Political institutions whose flawed philosophies and (morally) corrupt culture were exposed long before the 2008 collapse. They have been allowed to, essentially, micro (mis)manage – nationally and regionally – issues that required an holistic perspective (across domains), clear decisive leadership and macro management. Read more of this post