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Hot issues » Financial crisis
  • This time it's different - Click to enlarge

    Policy can brighten the economic outlook

    After five years of crisis, the global economy is weakening again. In this we are not facing a new pattern. Over the recent past, signs of emergence from the crisis have more than once given way to a renewed slowdown or even a double-dip recession in some countries. The risk of a new major contraction cannot be ruled out. A recession is ongoing in the euro area, the US economy is growing but below what was expected earlier this year, and a slowdown has surfaced in many emerging market economies.

    (664 words)
  • The euro: A message of solidarity

    The EU’s crisis has as much to do with leadership and solidarity as resolving fiscal and debt problems. It is time to dispense with caricatures and write the next chapter in the EU’s ongoing history. And for that, clear and transparent data will be needed.

    (1740 words)
  • ©Srdjan Zivulovic/Reuters

    Making the euro area work

    The euro area has been at the centre of the global financial storms for two years. Some serious observers have begun to question whether the euro area will survive these currents. The recently published OECD Economic Survey of the Euro Area shows how Europe’s bold experiment in economic integration can be made to work. 

    (1303 words)
  • ©Reuters/François Lenoir

    Euro: A strategic choice

    Poland is not yet a member of the euro area, though is watching the euro situation with close interest. 

    (703 words)
  • ©Deutsche Bank

    Is the euro crisis over?

    The new euro architecture that is to come into effect from July still suffers from shortcomings, and problem countries have yet to prove that they can survive within the euro says Thomas Mayer. It would be premature to sound the all clear on the euro crisis. 

    (935 words)
  • A labour market with few wrinkles

    Canada’s labour market was spared some of the more dramatic peaks and troughs of the economic crisis. Why?

    (790 words)
  • Africa's tax system: A survey

    Building tax administration capacity is needed to help spur development in Africa. A new survey shows that action is being taken, but more work is needed.

    (1418 words)
  • Business investment is picking up

    Is the worst economic crisis of modern times really over? Though there are risks to the downside, the latest OECD Economic Outlook points to a recovery taking hold.

    (358 words)
  • Financial reform: A start, but only a start

    Speculation and greed were at the heart of the global financial collapse. Reforms of financial regulation have gone some way to curbing their impact, but a lot more still needs to be done.

    (1293 words)
  • Fixing finance: Few easy answers

    The financial system may be out of intensive care, but it would be wrong to assume it has fully recovered. Major questions remain over how banks operate and how they are regulated. The solutions aren’t always obvious, but they must be found if we’re to avoid another crisis.

    (1587 words)
  • US health spending: A closer look

    The United States spent 16% of its national income (GDP) on health in 2007. This is by far the highest share in the OECD and more than seven percentage points higher than the average of 8.9% in OECD countries. Even France, Switzerland and Germany, the countries which, apart from the United States, spend the greatest proportion of national income on health, spent over 5 percentage points of GDP less: respectively 11.0%, 10.8% and 10.4% of their GDP.

    (678 words)
  • US President Barack Obama greets Angel Gurría ©Getty Images/OECD

    News brief - October 2009

    Outlook brightens; Progressive measures; Soundbites; Warning for EU; Protectionism warning; G20; Tax notes; Economy; Plus ça change

    (1391 words)
  • Grappling with grain prices

    A three-pronged grain reserve system could protect poor countries from volatile food prices and shocks, and help respond to food emergencies.

    (1198 words)
  • Bubble outbursts

    Your article on Islamic banking ("Islamic banking: an asset of promise?" No 272 April 2009) suggests that financial temperance is still possible. The ratio of assets leveraged against capital cited in the article, 20 to 1 in US banks, 30 to 1 in Europe, yet only 10 to 1 in Islamic banks reveals just how much the financial system has made greed systemic.

    (311 words)
  • © David Rooney

    Why tax matters for development

    In 2008 a US senate subcommittee issued a report alleging that banks located in tax havens cost US taxpayers some $100 billion a year in lost revenue. That is a considerable leakage, especially in light of US laws, institutions and other mechanisms to help control tax evasion.

    (1270 words)
  • ©Arnd Wegmann/Reuters

    Energy in a crisis

    The International Energy Agency (IEA) is 35 years old in 2009. A sister organisation of the OECD, it offers a timely reminder that a co-ordinated public response to a crisis can succeed.

    (1293 words)
  • ©Government of South Africa

    Banking on fair tax

    The financial crisis might not have been caused by taxation, but it nonetheless raises concerns about evasion, compliance and transparency in financial markets. The OECD Observer asked South Africa's minister of finance, Pravin Gordhan, who chairs the OECD's Forum on Tax Administration, to explain.

    (534 words)
  • ©Liechtenstein government

    Open book

    "The right to privacy will remain a cornerstone of our legal system"

    (837 words)
  • Islamic banking

    Crisis-weary bankers, financial regulators and investors could look to Islamic banking for inspiration.

     

    (1521 words)
  • The world needs to rewrite the rules of finance and global business

    The pain and anguish of the current global economic crisis were caused by a series of massive failures in the heart of the world’s most developed countries. We are in our current fix because of an excess of financial innovation, driven by ever-increasing thirst for short-term profit.

    (717 words)
  • Towards growth and a “social contract” for Europe

    European leaders should shift their focus from austerity to growth, not least to fight unemployment, says the ETUC, which urges a Social Progress Protocol to be attached to the European treaties. 

    (1183 words)
  • Look out, not in

    The crisis-induced trend towards inward-looking policies poses great dangers for Europe. 

    (816 words)
  • ©REUTERS/Scanpix Scanpix

    It’s all about people

    Ultimately the economic crisis is about people. That is why respecting human rights and adherence to democratic principles are fundamental when addressing the current economic crisis. We are in this together, so we need multilateral solutions more than ever.

    (966 words)
  • ©Yuriko Nakano/Reuters

    In Japan’s footsteps

    The global economy took a sharp turn for the worse following the collapse of Lehman Brothers in September 2008, and today it is increasingly apparent that the crisis has entered its second round. This time we are facing a combination of low growth and trouble in the financial sector, just as governments find themselves running out of economic policy options. 

    (879 words)
  • A euro at two speeds?

    How can the euro crisis unfold? For David McWilliams, Irish economist and best-selling author, the answer is probably a two-speed arrangement between core and periphery. 

    (1142 words)
  • Pier Carlo Padoan

    Pier Carlo Padoan ©OECD

    The evolving paradigm

    The history of economic policymaking has been marked by a succession of “paradigms” defining the goals of economic policy and the instruments used to attain them.
    OECD Chief Economist Pier Carlo Padoan looks at where we go from here.

    (991 words)
  • Banks in the balance

    Whether or not you believe they have been reformed enough, few institutions have received as much attention during the current economic crisis as banks.

    But how much money do they really control and how can their behaviour affect our economies so much?

    (223 words)
  • House prices: Which way now?

    Financial market failures were a major cause of the economic crisis, but property markets, particularly for housing, have had a leading part to play too. From the subprime debacle in the US to the bursting of unprecedented real estate bubbles in Ireland, Spain and Greece, among others, the overheating and collapse of property markets not only hurt savings and investments, but was felt throughout entire economies, affecting construction, employment, lending, spending and more.

    (564 words)
  • Recovery worries

    “Growth is turning out to be much slower than we thought three months ago,"  OECD Chief Economist Pier Carlo Padoan said when issuing his organisation's forecast update for major global economies on 8 September. 

    (232 words)
  • 50 years of trade and co-operation: Work in progress

    Canada is a trading nation. As a geographically large country, rich in natural resources and with a relatively small population, trade was a natural starting point. But Canada has built on this foundation and today boasts a highly skilled and educated work force, a well-developed physical and financial infrastructure, a transparent and predictable regulatory environment, and a high degree of openness to trade and investment.

    (715 words)
  • BIS

    50 years of productive partnership

    Why do some businesses, organisations, economies and even countries succeed in achieving their objectives while others do not? Important insights are provided if we treat each of these entities as a complex adaptive system, subject to the same processes as biological evolution.

    (1068 words)
  • Government of Canada

    Canada's economy

    Interview with James M. Flaherty, Minister of Finance, Government of Canada

    (1063 words)
  • The OECD is a "force for good"

    “The government’s top priority is reducing the nation’s deficit and returning Britain to strong and sustainable growth. That means the right economic policies at home and creating the right economic environment abroad.

    (259 words)
  • Governments and markets: Time to get serious

    How can we all learn from a crisis? Today, we find ourselves in a disappointing, if not altogether unexpected, predicament. The very governments who took bold and decisive action in the period of the financial crisis 2008-09 to bail out banks and keep financial markets alive now find themselves on the receiving end of severe punishment from financial markets. How could this be?

    (1497 words)
  • REUTERS/Daniel Munoz

    Bank crisis: Why private creditors should share the burden

    The financial crisis has taken a heavy toll on government finances and taxpayers are still footing the bill. Could private investors do more to help out? Mohamed El-Erian, CEO and co-CIO of PIMCO, believes they should. He explains to the OECD Observer.

    (991 words)
  • REUTERS/Cathal McNaughton

    Banking on a crisis and on its resolution

    The recent financial crisis has left a hole in the public finances of many countries. Yet, with the right preparation, governments may have been better placed to fund that gap. This holds lessons for future crisis resolution strategies.

    (1944 words)
  • Government of Ireland

    Ireland: Confident of a return to force

    A floor has now been placed under the banking crisis, albeit at a very high cost to the public purse.

    (641 words)
  • Building our future together

    We are celebrating the OECD’s 50th anniversary during the tail-end of the worst financial and economic crisis of our lifetimes. It’s a good moment to take stock and to ask the right questions. Why couldn’t we avoid the crisis? Were the policies and the policy mix we promoted the right ones, and how can we adjust these polices to new realities? What is more, are we doing enough to prevent another crisis? Are our economic theories, our models and our assumptions still appropriate? How should our organisation’s work be adapted so that we continue fulfilling our founding mission of promoting better policies for better lives?

    (872 words)
  • World economy: Crisis over?

    “The outlook for growth today looks significantly better than it looked a few months back,” OECD Chief Economist Pier Carlo Padoan says. Growth in the G7 economies outside Japan appears to be stronger than previously projected, with accelerating private sector investment and trade boosting recovery, his analysis showed. Read on here

  • Restoring public finances

    How can governments restore public finances and promote sound economic growth at the same time? With budget deficits stretched and public debt at historical highs, it will not be easy. But the OECD believes that with the right mix of policies much progress can be made.

    (801 words)
  • The fiscal imperative

    Governments and central banks managed to avoid a global economic catastrophe, but the crisis has left a legacy of nearly bankrupt governments. A quick return to solvency is required.

    (766 words)
  • Banking Stress Tests

    Hey you, stop wurfing and read about the 26 billion buck haircut!

    (604 words)
  • How to reform and be re-elected?

    “To reform and to perform” is the goal of many a serious politician. It is not an easy task.

    (1335 words)
  • Trimming pensions

    Pensions are a major component of public expenditure, and a target for governments looking to streamline budgets. What are countries doing to manage costs at a time when populations are ageing at an accelerated pace?

    (810 words)
  • When value chains backfire

    Did globalisation contribute to the economic crisis and if so how? This is one of several interesting questions asked in Measuring Globalisation: OECD Economic Globalisation Indicators 2010. In snapshot mode, this book looks at the financial crisis, trade, technology and multinational enterprises, and asks how these may have influenced the proliferation of the crisis, just as they helped spread prosperity and wealth in the first place.

    (353 words)
  • Better policies for better lives!

    As the OECD reaches 50, it must continue to become more relevant, useful and open within a new architecture of global governance, argues Angel Gurría, in this extract from remarks delivered following the renewal of his mandate as OECD secretary-general.*

    (1116 words)
  • Chile: Tackling social changes

    When Chile became the first South American country to join the OECD in 2010, the event was greeted as a seal on years of progress, not to mention hard work. Still, challenges remain, including in the fight against poverty, as Minister of Planning Felipe Kast explains in this interview with the OECD Observer.

    (462 words)
  • REUTERS/Gonzalo Fuentes

    From recovery to sustained growth

    Structural economic challenges and preparing for recovery were the dominant themes at this year’s Ministerial Council Meeting (27-28 May), under the chair of Italy’s prime minister, Silvio Berlusconi. Fiscal challenges, jobs, green growth, innovation, development, trade and investment, and societal progress all figured on the agenda. These highlights are based on the full conclusions, which can be read at www.oecd.org/mcm2010

    (722 words)
  • Torgeir Haugaar, Norwegian Defence Media Centre

    Health challenges after the crisis

    In the aftermath of the financial crisis, one question is how to balance the short-term pressure on the health budgets with the long-term obligations to deliver ever better health services to the public. Striking the right balance is not an easy task.

    (531 words)
  • Healthcare and the value of prevention

    With austerity the order of the day in most OECD countries, the public is understandably anxious that budget cuts do as little harm as possible to the services they depend on. Few sectors capture the dilemmas this poses for policymakers quite like healthcare.

    (859 words)
  • The confidence factor

    According to the latest Economic Outlook, growth in the OECD will reach some 2.7% in 2010. But while the global economy may be out of intensive care, it remains very fragile, as underlined by market volatility, rising public debt and high unemployment. A key missing ingredient is confidence. What must be done to restore it?

    (764 words)
  • Strengthening recovery, new risks

    Growth is picking up in the OECD area–at different speeds across regions–and at a faster pace than expected in the previous Economic Outlook (November 2009). Strong growth in emerging-market economies is contributing significantly. However, risks to the global recovery could be higher now, given the speed and magnitude of capital inflows in emerging-market economies and instability in sovereign debt markets.

    (1310 words)
  • Daniel Leclair/Reuters

    Helping migrants through the crisis

    As the world economy splutters back to life, policymakers have been focused on ending the jobs crisis. But despite the arsenal of policies aimed at assisting young people, the long-term unemployed and the unskilled, one of the most vulnerable groups of workers risks being forgotten.

    (1131 words)
  • Keeping Germany at work

    The crisis has bitten deep, but unemployment in Germany has fallen. How?

    (910 words)
  • News brief - July 2010

    Health spending rises; Round up; Soundbites; Benvenuto!; Economy; Food speculation question; Chinese flexibility welcomed; Slovenia joins the OECD; Plus ça change...

    (1777 words)
  • Call for co-operation

    Praising the co-ordinated international actions in response to the economic crisis, International Labour Organization Director-General Juan Somavia, World Trade Organization Director-General Pascal Lamy, German Chancellor Angela Merkel, OECD Secretary-General Angel Gurría, World Bank President Robert B. Zoellick, International Monetary Fund Manager Director Dominique Strauss-Kahn (L-R in the photo) and issued a joint press statement on 28 April 2010 calling for continued “international efforts with the aim of ensuring a lasting recovery in the financial sector and strengthening growth in the long term, and to address the impact of the crisis on poor countries and vulnerable populations”.

    (111 words)
  • Click to enlarge

    Click to enlarge

    The OECD Green Growth Strategy: Key lessons so far

    Can a durable recovery come from greener growth? That largely depends on the policies. In 2011 the OECD will deliver its Green Growth Strategy. Here are some early pointers.

    (1481 words)
  • Housing bust

    House prices in many OECD countries rose for more than a decade from the mid- 1990s–an unusually long and steep climb. Previously, booms typically lasted for about six years and house prices rose by about 45%; by contrast, the recent boom went on for twice as long and prices increased by an average of 120%.

    (239 words)
  • Gaining currency

    “Special drawing rights”, a little-known quasi-currency, are important for developing countries and could become one of the world’s reserve monies.

    (1373 words)
  • Partnerships for jobs

    A global crisis of long-term unemployment is looming. How can public-private partnerships help?

    (1161 words)
  • News brief - May 2010

    Tax burdens fall; OECD enlargement; Youth warning; Development aid rises, but......; Soundbites; Economy; UK adopts bribery bill; Poland mourns; Plus ça change...

    (1374 words)
  • Growing local

    Managing local ecosystems can help create jobs and spur sustainable economic growth.

    (1439 words)
  • Financial literacy and silver rights

    Financial literacy might not help ordinary people outsmart Wall Street professionals, but it can help people manage their funds.

    (1220 words)
  • Beating the jobs crisis

    Despite signs of recovery, make no mistake: this crisis is far from over. We are in the midst of the most serious jobs crisis since the Great Depression and the economic recovery is still very weak and fragile.

    (948 words)
  • Capitalism 4.0

    Rumours of capitalism’s demise may be premature. The question now is: what kind of capitalist system will emerge from the current crisis?

    (1358 words)
  • Saving capitalism from futile diversification

    Current theories of portfolio management are at odds with the wellbeing of citizens. Only government policy can address this.

    (1501 words)
  • Why markets need governments

    The recent economic meltdown was at root not a failure of character or competence, but a failure of ideas.

    (1144 words)
  • See full image

    How to correct global imbalances

    One of the side-effects of the global crisis has been a temporary narrowing of current account imbalances among the world’s major countries and economic areas. This is good news, but will it last? Policy actions may be needed.

    (1113 words)
  • How to put the global economy on a sustainable growth path

    Is policy sowing the seeds of the next crisis? There is a danger that it is. Imbalances in particular must be tackled.

    (1273 words)
  • What a lasting recovery needs

    One of the difficult challenges for governments facing a crisis is to keep  an eye on the wider picture. This is particularly true in OECD countries  today, as they fight down unusually wide fiscal deficits and heavy debt.  These problems are a sequel to the financial crisis that started in 2008.  Now, most countries, from the largest to the smallest, have to make  new sacrifices. People are understandably angry, feeling they are not  responsible for the current situation.

    (848 words)
  • Click to enlarge.

    Mancession?

    Unemployment in the OECD area is predicted to reach some 10% in 2010, up from about 5.6% in 2007. Men have been hit harder than women: across the OECD area, male employment has fallen by 3% since the recession started, while the decline for women stood at a tenth of that, at 0.3%. Hence the “mancession” tag bloggers and commentators have used to characterise the jobs crisis.

    (235 words)
  • Public-private partnerships

    Governments may find public-private partnerships (PPPs) especially tempting in the aftermath of a financial crisis, but how can hasty choices be avoided?

    (1088 words)
  • Beyond the crisis: Shifting gears

    The deep scars of the crisis can be relieved through appropriate policy action, particularly in competition, jobs, taxes and financial services. This would bolster long-term growth too.

    (1468 words)
  • News brief - March 2010

    Now for sustaining growth–; –as China sets the pace; Greening Greece; Soundbites; Economy; Aid shortfall; Chile's new president; Tax watch; Plus ça change...

    (1624 words)
  • Consolidating the recovery

    Spring is finally in the air for most OECD countries, as the signs of recovery start to multiply. The recession has been long and hard, so this is reassuring news. But while the worst of the crisis may be behind us, the recovery remains fragile, and there are still many policy challenges to address.

    (843 words)
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