Report by Alex Evans and David Steven exploring the future international institutional requirements for managing climate change, and including three scenarios for climate institutions between now and 2030. Commissioned by the UK Department for International Development. (May 2009)
The results of the US Treasury’s stress tests of America’s 19 biggest banks yesterday were less bad than many were expecting. Nine of the banks, including JPMorgan, American Express and Goldman Sachs, were given the all-clear by the Treasury – they weren’t likely to need any more state support.
And the other ten banks, including Citigroup,Wells Fargo, Bank of America and GMAC, only needed $75 billion in fresh capital. That’s alot, but it’s alot less than the $480 billion that Nouriel Roubini, or ‘Dr Doom’ as the economist has come to be known, suggested the sector needed in February.
That means that, if the stress tests are correct, the government’s ongoing presence in the banking sector is likely to be limited, and we are unlikely to see the sort of mass nationalisation of the sector that many, including Roubini (and myself) thought we would eventually see.
Geithner declared that the results marked the end of a long period of uncertainty, and ushered in a new stage of transparency in the crisis.Markets, on the whole, seemed inclined to believe him, with equity futures up in the US.
Now, the debate has shifted quickly from a discussion of mass nationalisation to the question of letting banks fail. If only two or three banks need large amounts of capital – Bank of America, Citigroup and GMAC, for example – then perhaps there is less systemic risk in letting them fail, and the government should look to carry out an orderly winding up of these institutions in a way that protects depositors without bailing out private lenders.
That much was suggested by Roubini in the FT yesterday, who was quick to re-position himself after his original apocalyptic estimate was shown to be apparently wrong.
But are the stress tests really a step forward for market transparency, or instead a confidence trick? (more…)
Russian President Dmitry Medvedev has launched a video blog, in which he appears in shirt and jeans (none of Gordon Brown’s ill-fitting jackets and terrifying grins) and expounds the virtues of the internet to Russia’s yoof. Apparently, it’s a good tool for governments to interact with their citizens, and for the latter to suggest “interesting ideas,” although Medvedev admits that state provision of online services is weak. Videos so far cover such gripping issues as the World Policy Conference in Evian, his preparations for the Annual Federal Assembly address, and “recreation and the development of popular sports in Russia.”
Perhaps more surprisingly, the blog allows for comments. Young Russians are understandably wary of this – several of those who have left comments so far are worried about being locked up if they say what they really think. According to the Atlantic Monthly, however, some of the suggestions have already been acted on – the president’s staff looked into a complaint about a local children’s hospital and the hospital called a press conference to discuss the problem.
Other comments have been less serious – one asked if the prez is going to an Alice Cooper concert in Moscow in June (no reply yet). Another wondered why he’s filmed sitting in front of a load of ancient monitors when he’s trying to look like a funky netizen. Thousands of people have remarked on various issues, and there are signs that the blog is lightening up – one vid shows Medvedev in a plane on his way back from Latin America, telling viewers his impressions of Peru, Brazil, Venezuela and Cuba.
Update: Actually, I’ve just read the transcript and that clip is not as exciting as it sounds – far from telling us about Havana nightlife, encounters with Rio transssexuals or doing drugs in the Andes, Medvedev limits himself to explaining what an important trading partner South America is and how great Castro was. Oh well, beggars can’t be choosers.
More evidence of increasing awareness of scarcity issues (and the consequent need for integrated policy approaches to managing them) over in the US: this presentation on ‘environmental challenges and global security’ from a colonel on the joint chiefs’ staff, given at a Department of Agriculture meeting on the food crisis held last week.
Intriguingly, it includes a recommendation for a new National Security Council inter-agency policy committee on environmental security – which would develop a strategy to “utilize all elements of national power (diplomatic, information, military and economic)” so as to prevent conflict and promote regional stability.
The Department of Defense isn’t the only part of the US government where there’s innovative thinking happening on this area. As I noted here last November, the National Intelligence Council’s report on global trends to 2025 placed a good deal of emphasis on scarcity issues,which was thanks to NIC’s Director of Analysis Mat Burrows.
Another key player in all of this is Carol Dumaine – like Mat, a career CIA analyst (where the Washington Post called her one of “the CIA’s dissidents”) – who’s now over at the Department of Energy’s Office of Intelligence and Counterintelligence as their Deputy Director for Energy and Environmental Security. Carol describes herself as an “intelligence ecologist” and argues that current global challenges require “generalists who are specialists of the whole” – see this excellent presentation that she gave at an Institute for Environmental Security conference in DC in March.
The signs are also positive that National Security Adviser James Jones recognises the importance of scarcity issues and the need for changes to machinery of government in pursuit of more effective approaches to them. As a Washington Post profile of Jones published this morning observes,
Although the administration is barely more than 100 days old, Jones has launched an ambitious restructuring of the White House national security apparatus so it can focus on modern issues such as energy and climate change.
A worrying factoid from CNN (courtesy of Chris Blattman):
In each of the four major pandemics since 1889, a spring wave of relatively mild illness was followed by a second wave, a few months later, of a much more virulent disease. This was true in 1889, 1957, 1968 and in the catastrophic flu outbreak of 1918, which sickened an estimated third of the world’s population and killed, conservatively, 50 million people.
As the small print in stockbrokers and pension funds’ ads always tells us (if only we’d listened), the past is not always a guide to the future, but if the swine flu scare wanes over the summer, it would be dangerous to get complacent.