OCTOBER 2012 | VOL. 26 NO. 10
The annual meetings of the International Monetary Fund and the World Bank in Tokyo opens under the shadow of continuing economic uncertainty.
The recent decision of the European Central Bank to buy unlimited sovereign debt from member countries that formally request it—assuming they are willing to accept and implement the strict programs required of them-will act primarily as a deterrent against speculation, but it also signals a more powerful role for the ECB in dealing with the crisis and defending the euro. The IMF, too, will probably soon play a role—working in tandem with the ECB—in assessing eurozone members and in designing overall solutions.
It is the first time such a decision has been made without a unanimous vote of EU central bank representatives: The German Bundesbank representative registered his opposition to the purchasing plan. Meantime, the German high court approved the permanent bailout facility-although it insisted Germany keep veto power on related decisions.
To the economic slowdown must be added political uncertainty in various quarters. In the US, presidential elections will be held in November. Not only is it unclear who will prevail, but it is also hard to predict the economic policy that will follow, and how the US Congress will negotiate the fiscal cliff of expiring tax incentives at the end of this year.
For us at Global Finance, this season and this issue are also a time to celebrate excellence in banking and central bankers: to recognize those institutions and individuals that improve their performance even in tough economic conditions.
We received a strong worldwide response to our pre-issue announcement of the 50 safest global banks and annual central bankers’ report cards, highlighting the keen awareness of tough conditions for both worldwide economies and banking markets. Global financial firms require third-party performance assessment, and the public needs to know who guarantees stability, and why. In a troubled economic climate this information is even more essential. For us, it is confirmation of our editorial mission.