Loans and Finance

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Friday, January 25, 2008


It seems that the central banks just don't get this global economy thing.

Despite the fact that the Western world is linked financially, and despite the fact there is a complete loss of confidence in the banking/finance sector, central banks still refuse to co-ordinate their policy.

The Fed, earlier this week, cut rates by 0.75% and is likely to reduce them by another 0.5% next week. Yet the Bank of England, at best, is likely to only reduce rates by 0.25% next week and the ECB (as usual with its head in the sand) refuses to make any change at all.

When will the central banks get it through their heads that the current crisis is one of confidence?

The only way to kick start the financial markets is a co-ordinated set of rate reductions, that demonstrate to the world that the central banks are working together to resolve the crisis.

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