Atlas Magazine July 2009

The end of the crisis

Twelve months after the breakout of the first financial downturn of the 21st century, signs are indicating that the crisis has bottomed out and that recession is nearing its end.

Time has now come to learn the first teachings of this tsunami which has engulfed everything on its way.

The first thing to notice is that insurance was able to withstand the impact of the crisis as it did not collapse as the banking and motor industries did. It is not a systemic risk. The crisis is due to failures in the regulatory system of the American financial market.

The second finding pertains to the role of public authorities. The taboo of nationalizations, however temporary, has been shattered by the same party who has been its biggest opponent, in the near past: the United States of America. Henceforth, the State stands as the ultimate recourse, the only genuine rampart against the downturn of international finance.

Eventually, the last finding is about emerging countries which have become the major catalysts of the world's economy. China, India, Brazil and Saudi Arabia are pulling the rest of the world. Developed countries have little accumulation of growth and their future partially rests on their capacity to access emerging countries' mega markets.

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