ECB warns of global imbalances threat

In an article 'Prospects for real and financial imbalances and a global rebalancing', in its March 2010 Monthly Bulletin, the European Central Bank has warned that distortions in the global economy that provided the backdrop to the financial crisis in 2008 threaten to widen again and upset the worldwide recovery.

In unusually blunt language, the ECB has made clear its fear that governments are not doing enough to put the global economy back on a sustainable growth path – despite international policy initiatives in the past year.

The article aims to shed light on global real and financial imbalances, which have been at the centre of the international economic policy debate for some time now and are likely to remain so in the years to come.

To that end, it pays specific attention to the link between the build-up of these imbalances in the years preceding the outbreak of the crisis and the financial crisis itself, and to the challenges and risks faced by the global economy in dealing with imbalances in the future.

The article also discusses the new international policy agenda for global rebalancing launched at the Pittsburgh
G20 Summit in September 2009, notably through the G20 Framework for strong, sustainable and balanced growth, and looks at why this will be important for the global economy in the future.

ECB: Monthly Bulletin, March 2010: Prospects for real and financial imbalances and a global rebalancing, http://www.ecb.int/pub/pdf/other/art3_mb201004en_pp91-100en.pdf

ECB: Speech, 15.4.10: Taking stock: where do we stand in the crisis? Speech by Jürgen Stark, Member of the Executive Board of the ECB at BMW Stiftung Herbert Quandt, Washington D.C., 15 April 2010 http://www.ecb.int/press/key/date/2010/html/sp100415_1.en.html

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