October 11 2008 George Bush G7 Speech

As many of you know, on Saturday, President Bush gave a speech on the financial crisis to the G7. Not surprisingly, this speech avoids any blame for the current financial crisis, instead focusing on the need for countries to present a unified front in terms of response to the crisis. Even the IMF's Managing Director Dominique Strauss-Kahn remarked "[p]reventing a recurrence of these failures will require an international effort, because borders do not confine financial institutions or keep out financial turmoil."

Just yesterday, David Zaring over at the Conglomerate gave a quick overview of some of the country efforts directed at the financial crisis and asked "When will the Globe Get Around to Globalizing This Crisis Anyways?" Monday's early signs have been that the market likes the international efforts on the crisis, even if they might be characterized as less than fully coordinated. On Monday, Germany rolled out a $671 billion bank bailout creating a "financial market stabilization fund." The German plan requires companies to be stable, though an exception exists for "exceptional" cases where the company's survival is important to the financial system.

The devil is always in the details, though. As we have seen in the United States, the efforts of the Department of Treasury and Federal Reserve have been less than static. Although the early morning results today are encouraging, we will have to wait to see how the market views the international efforts as more details of the individual plans become known. Moreover, will the various patches put on the financial system by individual countries and the IMF be enough to restore confidence in the markets?

— JSM