« G7緊急声明 問われる具体的な協調行動 | トップページ | 社説:首相退陣を明言 代表選の始動を急げ »

2011年8月10日 (水)


--The Asahi Shimbun, Aug. 9
EDITORIAL: Countries need to work together to avert another global financial crisis

Standard & Poor's, the credit rating agency, has stripped the U.S. government debt of its top-notch rating for the first time in history.

Europe's sovereign debt crisis is showing no signs of waning.

And the yen is trading at historically high levels against the greenback.

Concerns about government debt in the industrialized world are threatening to create a full-blown financial crisis that will deliver a massive blow to the global economy.

The urgency of the situation prodded the Group of Seven leading economies into action.

At an emergency conference Aug.7, their finance ministers and central bankers issued a joint statement pledging to work in tandem to regain fiscal health and restore stability in foreign exchange markets.

We welcome their quick response to the situation.

For many years, U.S. government bonds have been regarded as the safest financial assets in the world.

But Standard & Poor's, one of the three major credit-rating agencies, has--for the first time ever--lowered its rating of long-term federal debt one notch from the top grade of AAA.

The investment services company said the downgrade was based mainly on a bleaker outlook for the U.S. public finances in the wake of political confusion in the Congress over the issue of increasing the government's borrowing limit.

As former Federal Reserve Board Chairman Paul Volcker once said, the key question concerning the problem of government debt is not whether the country can pay back its debt but whether it has the will to do so.

The recent partisan squabbling over the debt ceiling issue has called into question Washington's will to tackle its fiscal woes.

The U.S. government and Congress should work together to come up with stronger, more convincing measures to reduce the federal debt.

The two other major rating agencies, Moody's Investor Service and Fitch Ratings, have decided to maintain their top credit ratings for the U.S. government.

There are clearly no other financial assets that are as safe, liquid and actively traded as U.S. government bonds.

Analysts say the downgrade is unlikely to prompt investors to dump Treasuries.

But even the indirect effects of the downgrade are serious enough to warrant much attention.

As the risk of investing in Treasuries has increased, investors are likely to try to reduce their exposure to riskier investments, with serious consequences for stocks and bonds with lower ratings.

The immediate worry is that the rolling sovereign debt crisis in Europe may become even worse.

The G-7 joint statement called on the member states of the European Union to swiftly ratify and implement their recent agreements on measures to enhance the European Financial Stability Facility, a bailout fund to rescue debt-ridden European countries.

Europe needs to act with haste to expand the fund so as to ease concerns about Italy's debt crisis.

The joint G-7 statement also suggested that the world's richest countries are ready to make concerted intervention in currency markets to stop the dollar from weakening further and to curb wild fluctuations in exchange rates.

Japan wants to prevent the yen, which is already close to the all-time high against the dollar, from rising further. 日本は戦後最高値に迫る円高の進行を押しとどめたい。

But the dollar's weakness is not a problem for Japan alone.

A repeat of the devaluation race that occurred last autumn must be avoided.

The current crisis resulted from a confluence of deep-rooted problems.

Countries need to take steps to fix their public finances while preventing their economies from sinking into recession in the face of relentless pressure from markets.

The question is whether the major industrial nations will be able to commit themselves firmly to cooperation for achieving these goals.

Also important is expanding this international cooperation to include key emerging countries like China.

Another big challenge facing rich countries is how to deal with the consequences of the trend toward a multipolar currency system, which will be accelerated by the downgrade of U.S. government bonds.

The multitude of challenges facing the world economy demands strenuous and coordinated international efforts based on a broad perspective.


« G7緊急声明 問われる具体的な協調行動 | トップページ | 社説:首相退陣を明言 代表選の始動を急げ »





« G7緊急声明 問われる具体的な協調行動 | トップページ | 社説:首相退陣を明言 代表選の始動を急げ »