The debt of households 48 in 1981 to 100 in 2007

Simply to say that we are at a turning point in the history of international financial markets is to underestimate the magnitude of the crisis and its consequences. If many agree to recognize that financial institutions too borrowed from their own funds, affected too much of these loans to risky investments and sold too easily these same investments around the world to individuals and institutions badly informed about the risks involved, the views are more shared on the reasons for the crisis and the means to implement to the overcome.

For some people criticized financial institutions as well as their traders and managers, in particular in the United States and Britain of having acted irresponsibly. They will turn against the brilliant mathematicians at the origin of complex models on which they are based. Brilliant mathematicians, démordent not: the fault lies in the housing market, which, rather than continue his ascent, according to their assumptions, began a downturn late 2006, defying their models. On the dock also: rating agencies, which have not assessed the risk accurately, perhaps because of conflicts of interest inherent in their operation, knowing that they are paid by the companies which they note titles.

Others derive red ball on the advice of the Federal Reserve of the United States: by reducing the interest rates suddenly in 2002, he has developed the provision of large financial institutions of the almost free funds, after adjusting for inflation, paving the way to all these irresponsible behaviour and risk. Finally, it is alleged the regulatory authorities, especially in the United States and Britain, of not properly monitored or supervised financial institutions. And Governments, especially in the United States and Britain, have, from the 1980s, deregulated financial markets strong principle according to which they regulate themselves.

But deeper forces were also at work. Considerable trade surpluses of China, the Japan of the Germany, and exporters of oil, recycled through borrowing countries, contributed to a period of easy money, which encouraged borrowers in debt. In 2008, the countries who had the highest deficits were, in order, the United States, the Spain, the United Kingdom, the France, the Italy and the Australia. The United States had a clear step ahead. The share of the debt private GDP is increased from 123 in 1981 to 290 in the third quarter of 2008. The debt of households, 48 in 1981 to 100 in 2007.

The list of the counts is long. It should be to consider what should be there and what it will happen in the financial markets. Undoubtedly, it regulation more efficient and rigorous, harmonized at the global level. Must meet the requirements of equity, prohibiting the negotiation of off-balance sheet derivatives and prevent conflicts of interest. Central banks will have to take more precautions to prevent the development of phenomena of "bubble".

In the short term, all major countries will be forced to widen deficits to support the application. Deflation of the balances in the heart of the global economy is widespread. But there is a limit to what the debtor countries can do. The United States launched a large-scale fiscal stimulus plan ($787 billion), but the market does not seem to able to absorb forever the Treasury bills, and liabilities of the Fed. The interest of long-term bonds increased. China has implemented a major program of public spending. In contrast, the euro area and the Japan response remains insufficient.

In the long term however, rebalancing. Countries with large external surpluses cannot simply import the rest of the world and, therefore, demand for export unemployment. They shall, to the contrary, develop domestic demand relative to potential output. A political and cultural turn major but to China, the Japan and the Germany. It is the only way to deficit countries, starting with the United States to avoid financial ruin. The only way to deal with a net increase of protectionism in the United States and other deficit countries where the unemployed and other precarious workers put pressure on their Government to protect employment.

Deficit countries, however, need to promote export-led growth which has not been so far the highlight of the United States. Will they be able to do so without causing a too rapid depreciation of the greenback, thereby undermining the status of world reserve currency is the dollar For the moment, we don't know absolutely nothing. These reforms difficult to implement, but which can, without doubt, make the economy.