Mr Grenville discusses financial crises and globalisation from an Australian perspective
A paper presented by Mr Stephen Grenville, Deputy Governor of the Reserve Bank of Australia, to
the Reinventing Bretton Woods Committee Conference on "International Capital Mobility and
Domestic Economic Stability" in Canberra on 15 July 1999.
As part of the debate on the Asian crisis, two separate views emerged to explain the crisis - those who
blamed deficiencies in the crisis countries themselves (cronyism, corruption, misguided policies and
so on), and those who found intrinsic flaws in the international capital markets.
Time has brought some perspective to these issues, and a consensus is emerging that a variety of
problems contributed. Not surprisingly, with complex and multiple causation, there are lots of things
to be fixed. The domestic/international dichotomy is still a useful one, here, because it allows us to
focus exclusively on the international issues, without implying that the domestic deficiencies were
unimportant. A conference on "Reinventing Bretton Woods" lends itself to exclusive focus on the
international aspects, and, if "reinventing" is needed, something must have gone wrong with the old
structure of discussion, rule - making and crisis response.
The focus, in this paper, is on Australia, but we need to put this in a wider context to draw out the
lessons for ourselves, and for others:
Why were we in Australia not subject to the same degree of contagion as our near neighbours?
As participants in the debate on reforming the international economic architecture, what elements of
reform should Australia be promoting?
Why Australia escaped
There were certainly serious concerns, 18 months ago, that the Asian crisis would do significant
damage to Australia. But it was not a concern about contagion and a repeat of the Asian problems - in
the form of a major reversal of capital flows. Rather, the issue was that our international environment
would be unfavourable, with stunted growth in our export markets, particularly in the region which
had provided us with such a useful stimulus over recent decades. As things have turned out, domestic
demand has remained strong (with very little adverse confidence effects from Asia), and the lower
exchange rate effectively buffered us from the worst aspects that had been expected. But it is worth
emphasising that no one, as far as I know, ever expected Australia to be sucked down into the same
financial maelstrom - our adverse impacts were expected to be from secondary effects. It was always
clear that we would avoid the direct contagion, because we were not subject to the fatal combination
that had infected Asia - the interaction of large and volatile capital flows, with a fragile domestic
financial sector. The capital flows to Australia are nothing like as volatile (and are not even as large):
but, more importantly, we did not have a fragile domestic financial sector.
It is true that Australia is very dependent on international capital inflows, with an average current
account deficit of around 41⁄2 per cent of GDP for the last couple of decades. These flows are large,
but nothing like the flows experienced in Asia: in 1996, for example, Thailand received capital flows
equal to 13 per cent of its GDP. Just as important, the capital inflows that funded the Australian
deficit were, by - and - large, quite stable. Even in the mid - 1980s "Banana Republic crisis", which
saw a large change in the value of the Australian dollar, the most that the current account adjusted in
any one year was a little under 2 per cent of GDP (in 1986/87). Compared with changes in current
account balances in some countries in East Asia in 1998 of up to 15 per cent of GDP in a single year,
our fluctuations were manageable. One - third or more of Australia's capital inflow is in the form of
foreign direct investment, which, even in the crisis countries, tended to be quite stable. A quite minor
part was in the form of the elements which turned out to be extraordinarily volatile and flighty in
Asia - bank - to - bank flows. The three crisis countries had been receiving bank - to - bank flows at
an annual rate of around US$50 billion in the years leading up to the crisis, and were subject to
outflows - total reversal - of nearly US$75 billion in the first nine months of the crisis. Nor,
incidentally, were we vulnerable as a creditor: Australian banks had not lent much to Asia.
Australia has had plenty of experience of changing sentiment - "flavour of the month" at one moment
and poor cousin the next - but has not had the kind of total volte face experienced in Asia ("euphoria
turned to panic without missing a beat" (Sachs 1997)). One reason why Australia is not subject to
these sorts of dramatic reversals is the depth and maturity of our financial markets. The institutions
and instruments that foreigners invested in tended to be longstanding and stable, with quite
well-defined prices and behaviour, so there was no basis for the kind of blind-panic flight that
occurred in Asia. Surprises occur in Australian financial markets, but not to the extent that occurred
in Asia.
More importantly, Australia's financial sector (centred on the banks) was particularly strong. It might
be worth pausing a moment, simply to record that the strength of the Australian financial sector was
in large part because it had already had its "learning-by-doing" crisis nearly a decade earlier. Just
about every episode of financial deregulation has been accompanied by a period of crisis and turmoil.
In Latin America, in the 1980s, the nub of the issue is captured in the title of the definitive analysis of
the period: "Goodbye Financial Repression, Hello Financial Crash" (Diaz - Alejandro 1985). Even the
United States, less than a decade ago, experienced the Saving-and-Loans crisis, the direct result of
lop-sided deregulation and market-distorting official guarantees. The United Kingdom and Japan had
credit-induced asset booms and busts only a decade ago. Sweden experienced a meltdown of its
financial sector in the early 1990s. Australia was not an exception to this generalisation, but had its
crisis in the 1980s. It is hardly surprising that a cosy, protected financial sector, when newly exposed
to the chill winds of international competition and much more hard-edged, sharp-pencil tactics, is at
its most vulnerable. Perhaps the most dangerous aspect is that the additional competition lowers credit
standards - the new competitors look for customers to lend to, and the old institutions preserve their
markets by being readier to lend to customers who previously would not have been regarded as
creditworthy. Deregulation gave borrowers a new-found freedom, and for some of them it was a case
of giving them more rope with which to hang themselves.
"Failure builds character", they say: so, too, does failure give rise to a corrective process that makes a
repeat less likely. We certainly had this experience in Australia during the 1980s, which was the main
reason why our financial sector was in such good shape when the Asian crisis hit in the 1990s. The
corporate sector also learned the dangers of currency speculation and became much more cautious.
While recording the immunising effect of "been there, done that", it might be worth remembering
some aspects of this common experience. We had our own foreign-currency-denominated borrowing
experiences (remember the Swiss franc loans?), but fortunately they were, at least in macro terms,
insignificant. While we are remembering our luck, we might remind ourselves that Australia's foreign
exchange crisis (which occurred in the mid 1980s, associated with the "Banana Republic" debate)
occurred separately from the prudential problems in the banking system, which are associated with
the boom and bust of the asset price bubble of the late 1980s. Asia had its foreign exchange crisis
superimposed on its prudential crisis.
Most of the players in the Australian market have a good understanding of how the foreign exchange
rate would normally behave - i.e. the exchange rate is reasonably well anchored in "the
fundamentals". But even in this world, some puzzling things still happen. One such puzzle is the
Australian dollar's tendency to move more than might be expected over the course of the commodity
some
cycle. Even when terms-of-trade changes are temporary, we might expect change in the
exchange rate. But what we have seen, quite persistently since the float, is movement in the exchange
rate by around 25 or 30 per cent between peak and trough, and this is much more than can be
explained simply in terms of the proper textbook reaction to cyclical terms-of-trade changes (see
Gruen and Kortian (1996)).
We have, over time, learnt to adapt to this world. With low inflation well established now, there is
less danger that these cyclical fluctuations in the exchange rate will damage inflationary
expectations - they seem to be absorbed, to a large degree, in margins. The Reserve Bank's response
is to be ready to intervene in the more extreme swings of the exchange rate. We do this principally
because there is always some danger, at the extremes, that these swings may damage confidence in the
domestic economy (particularly in the downward swings). Incidentally, in the process, we make a tidy
profit through the rather old-fashioned form of trading, under which we buy cheap and sell dear
(Andrew and Broadbent (1994)). This experience, over more than a decade, has made us sceptical
about the Friedmanite idea that speculators always buy cheap and sell dear, and if they do not, they
quickly go out of business. Why have the processes of natural selection not weeded out our
counterparties from this zero-sum game?1
With this experience in mind, we were less surprised than some when the Asian currencies, once
unhooked from their semi-fixed pegs, moved excessively - each of them over-shooting dramatically,
by far more than any conceivable initial over-valuation. For all the virtues and advantages of
exchange rate flexibility, it is dangerously naïve to "sell" the idea that floating the exchange rate will
be a painless solution to international financial integration.
Having made the case that Australia was never vulnerable to the sort of catastrophic capital reversal
that was experienced by some Asian countries, the question is: "why are we so interested in the issues
of new financial architecture?".The short answer is that we believe that international capital markets
not
are working as well as they should. Even if Australia can survive in the current world, we all
(developed and emerging markets alike) would benefit from some changes in the international
architecture.
A reform agenda
Since the crisis broke, there have been five issues on which Australia has spoken out in international
forums:
• Representational issues;
• Hedge funds;
• "Bailing-in" the private sector;
• Capital controls;
• Transparency.
International representation
Well before the Asian crisis, it had been obvious that the international institutions formed shortly
after World War II no longer represented the current world economy. As a small country, Australia
accepts that many important international decisions will be made in a small sub-set of the largest
countries, such as the G3. It is harder to accept that important decisions (such as the development of
global prudential rules) should be made in a group as unrepresentative as the G10 - which contains
four smallish European countries, of which only one is as large as Australia. If these institutions are
Eurocentric (only one Asian: no Latin American representation), the exclusion of emerging markets is
just as obvious. The IMF tackles these problems differently, with formal representation of all
members - but few would doubt who is calling the shots, with America alone having enough votes to
veto issues. Constituencies represent hugely different population sizes and degree of interest in
international issues. This is why we were so attracted to the idea of G22, when it formed in the
aftermath of the Asian crisis. In this form, it has been vetoed by the European countries not yet ready
to give up their over-representation on international economic issues. These issues are on-going and
unresolved, but one beneficial result of the Asian crisis is to bring this issue to the fore, and while
G22 no longer exists, a wider representation on the working groups discussing some of the important
issues (such as highly-leveraged institutions, offshore markets and short-term capital flows) has been
achieved.2
Hedge funds
As noted above, Australia had its searing experiences with volatile exchange rates in the mid 1980s,
but has now come to terms - and is comfortable - with its floating exchange rate. We think that, in
general, it works well, and that the float has been enormously beneficial for Australia. We have come
to accept some over-shooting as a puzzling but tolerable quirk of the market.
In the most recent episode (coinciding with the Asian crisis), however, we saw a variant on this
theme - speculators who believe that they can make money by attacking an exchange rate which has
already over-shot, so that it over-shoots even further. The tactic is straight-forward enough - quietly
take a short position in the currency which is already a bit under-valued, and then, by a mixture of
highly-public additional short selling and vigorous orchestration of market and press opinion, get the
exchange rate to move down quite a bit further. As it does, a bandwagon forms, with market players
anxious to sell the currency as it becomes cheaper, in the belief that it will become cheaper still. As
the herd moves in, the original speculators can square-up their position, at a profit.
This is the world that we saw in operation in the middle of last year. As a matter of shorthand, we
have referred to these attacks as being driven by hedge funds, but this terminology is probably more
specific than we need to be to make the point. It is worth emphasising, here, that we think it was
useful that the Australian dollar moved down somewhat in 1998, reflecting the fundamentals of a
much less benign external environment. This softening of the exchange rate was an important factor
in buffering Australia from the external crisis. But too much of a good thing is a bad thing. The
gathering downward momentum, one-sided sentiment and thin market were certainly matters of
considerable concern to us, in the middle of last year, and this was reflected in our actions to support
the exchange rate.
The most disturbing element of this is that it was part of a concerted effort at market destabilisation.
Some of the players themselves told us, at the time, that their objective was to push down the yen to
the stage where the renminbi was under irresistible pressure to devalue, which would have broken the
Hong Kong dollar peg. The Australian dollar was a minor secondary target - collateral damage - for
these Masters of the Universe. As things turned out, we came through this episode quite well. But it is
a matter of historical record that this episode came to an end because of the combined effects of the
LTCM near-meltdown and the financial crisis in Russia - we were saved by crises elsewhere. So
while we came through that episode quite well, and we are confident that we have the resilience to
weather similar episodes, we carry from this experience a strong viewpoint into the debate on
international financial architecture concerning the hedge funds (or, as they are known in that context,
the "highly-leveraged institutions"). There are those who deny, even now, that the hedge funds played
any significant role. For these pundits, it may be enough to simply observe that the hedge funds
themselves do not deny their actions (George Soros has written a best-selling book about it!) - it
walks like a duck, quacks like a duck and says it is a duck - what more evidence do you want? But the
movement of exchange rates over the period - even large currencies such as the yen - provides more
evidence. As the hedge funds cut their short positions in yen to cover their disasters in the rouble, the
yen rose 15 per cent in a little over a day, driven by events unrelated to any Japanese "fundamentals".
Is this a well-functioning market?
When we first talked about our experience with hedge funds in mid 1998, this was derided as "the
Australian anecdote". But you may recall the old quip about the plural of "anecdote" being
"data".Hong Kong, South Africa, Malaysia and Thailand all pointed to their "anecdotes". Then came
the near-collapse of LTCM: the tenor of the debate changed. But as the LTCM crisis recedes,
international concerns have become more muted, even stifled. The G7 authorities are prepared to
concede that there were prudential issues involved in the high leverage of these funds - it threatened
those who had lent to them. But there is less recognition of the market integrity issues involved -
i.e. the general damage they do by inducing more volatility (and otherwise-unnecessary interest rate
increases) into exchange markets (see two papers by the RBA (1999)).
Bailing-in the private sector
We have argued that there should be a greater readiness, in the event of crisis, to "bail-in"
privatesector creditors - i.e. to require a stand-fast on repayments and the working out of orderly
arrangements for repayment, which may well involve delay in repayment and, possibly, creditors
taking a "hair-cut" on their repayment.
Some private-sector participants in this debate have articulated a sort of bewildered resentment at the
idea of compulsory bailing-in in the course of an orderly debt arrangement: they talk in terms of
"consenting adults", who have freely made a contract which no-one else should rend asunder. It does,
however, seem a bit more complicated than this. First, private creditors accept, within all domestic
jurisdictions, the possibility of bankruptcy procedures in extremis, which involve two elements - the
declaration of inability to pay in full; and some kind of stand-fast in which the available assets are
assembled and decisions made on an equitable distribution. This procedure, everywhere, over-rides
individual deals done either before or after the event. The justification for this is that an orderly
arrangement is better for just about everyone than an unseemly rush to seize any available assets. This
rationale carries over into the international forum in principle, although of course finding legal
jurisdiction is another matter altogether. This was well illustrated in late 1997, when Korea was
within a couple of days of defaulting on government-guaranteed bank debt owed to foreign banks.
Under the detailed orchestration of the US and IMF authorities, a deal was struck whereby
US$24 billion of bank-to-bank debt was rolled over, at an attractive interest rate for creditors. This
deal changed sentiment towards Korea dramatically, and it would be hard for any creditor to claim
that the outcome was anything except greatly beneficial to them.
But the case for bailing-in the private sector goes beyond this, at least in cases where the official
sector (often through the IMF) has taken part in something analogous to a "lender-of-last-resort", in
which additional funds are made available to shore-up creditor confidence. The rationale for such a
facility goes beyond the normal bankruptcy arrangements, to the further argument that where the
problem is one of liquidity rather than insolvency, a lender-of-last-resort will avoid "runs" on debtors.
Given that it is taxpayers' money (usually via the IMF) which is being put at risk to bail-out
privatesector creditors, taxpayers are entitled to expect some contribution from the creditors. The relevant
lessons come from Mexico in 1994/95. Prior to the crisis, investors had received higher returns for the
risk they were running. When confidence evaporated and creditors refused to roll-over their loans at
the end of 1994, default loomed. The IMF and the US Government acted as lender-of-last-resort,
repaying all creditors in full and without delay. This was, in almost all aspects, extremely successful.
The "run" was contained, and Mexico experienced a "V-shaped" recovery. But it did highlight the
moral hazard that goes with bail-outs - it left the impression that lenders would be protected when
things went wrong (see Dooley (1997)).
The contrast to this is bailing-in the private sector - enforcing a stand-fast and "hair-cut". This not
only addresses the source of the immediate problem, but it is also equitable, and directly addresses the
moral hazard problem.
In making this case, Australia has argued that such arrangements should focus exclusively on
sovereign or quasi-sovereign debt, in particular the bank-to-bank flows: the bulk of the capital
reversal in Asia was taking place between banks, who were using their access to government
guarantees in order to finance the capital outflow. This makes an important distinction between those
who can easily "take the money and run" (on the basis of government guarantee) and those who lent
to non-banks, who will have to work through the domestic bankruptcy system to gain repayment.
Much self-righteous indignation has been expressed by private-sector creditors at the very idea that
the authorities might impose stand-fasts and hair-cuts on them. This would sound less disingenuous if
it was not coming from the same voices who were so astounded by the Russian default of
August 1998 - astounded not by the patently parlous creditworthiness of the country they had lent to,
but by the absence of any official rescue package to save them from default.
Controls on capital flows
Two important lessons from the crisis are:
• That short-term flows were particularly vulnerable to reversals;
• That the transition from financial regulation to deregulation is a particularly vulnerable time.
There is now a wide acceptance that, instead of a blanket presumption in favour of quick and
complete financial deregulation, deregulation should be "orderly", keeping pace with the build-up of
the necessary institutional infrastructure - particularly capacity for prudential supervision. While this
is now generally accepted, the operational corollary of this is not. If the problem was the huge capital
inflow, what will prevent a recurrence when the next wave of euphoria arrives, and later evaporates?
One aspect is clear enough - far-reaching prudential rules should be put in place - e.g. restrictions on
banks' short-term borrowing and on foreign-currency-denominated borrowing. In putting these
prudential rules in place, it is important not to simply shift the risks out of the formal financial sector
but leave the risk with those who are even more vulnerable - this just makes room for more problems
later.
The other issue is whether Chilean-style controls on short-term capital inflow may also be useful.
Such restrictions on short-term borrowers may not be perfect, but they make more sense than some of
the alternative "solutions" which have been put forward. One suggestion (quoted by Greenspan
(1999)) is that countries should hold foreign exchange reserves equal to all the short-term debt which
is going to fall due over the next year. If this is a serious suggestion, then it raises the issue of why
this short-term debt was useful in the first place, if the proceeds of the short-term borrowing have to
be stacked away in reserves (at a lower rate of return than the cost of borrowing).
One lesson is that countries should resist the blandishments to set up arrangements like the Bangkok
International Banking Facility, and should keep a very wary eye out for the operations of fly-by-night,
foot-in-the-door financial entrepreneurs whose aim is to sell sophisticated (i.e. hard to understand)
financial products to unsophisticated (i.e. gullible) customers, under the guise of "market broadening"
Transparency
Great emphasis has been placed on transparency - and it is as hard to disagree with this as it would be
to disagree with the notions of peace, freedom and motherhood. But the transparency which is being
advocated in the debate is a very partial concept. Whereas a case could be made that markets work
better if all participants have full information, the emphasis so far has been confined to getting the
official sector to give detailed and frequent information on foreign exchange reserves, for example.
Meanwhile, the hedge funds and other major players can hold their cards close to their chest (even the
investors in LTCM were not given details of the portfolio). If markets truly work better when better
informed, this principle should apply to all players who are big enough to move markets. This view is
gradually being accepted in some of the work taking place currently in the international arena, so I am
hopeful we will see increased disclosure by all market participants over the coming couple of years.
The context of the debate: Globalisation
Given the complexity of the issues, it has been disappointing that much of the debate has been driven
by ideology. Specifically, ideology seems to add a special piquancy to the debate on capital flows.
The argument here is reminiscent of similar debates on "free floating" for the exchange rate: "free", in
this context, has the same connotation as "the free world" or "free speech", i.e. indisputably a Good
Thing. Absence of any rules seems to be a particular virtue. A theologian picked up the flavour of the
debate, likening the arguments in The Wall Street Journal to his own specialisation: "Behind
descriptions of market reforms, monetary policy and the convolutions of the Dow, I gradually made
out the pieces of a grand narrative about the inner meaning of human history, why things had gone
wrong, and how to put them right. Theologians call these myths of origin, legends of the fall, and
doctrines of sin and redemption." (Cox 1999).3
Some commentators took this vantage-point because they wanted to view the issues as part of a wider
debate on the inevitable global triumph of the free-market paradigm (see, for example, Zuckerman
(1998)). It was, in many ways, a curious prism through which to view the issues, because it was pretty
clear that - whatever the deficiencies of alternative systems - this was hardly a triumph of market
forces. Whatever the advantages of more open capital markets, the collateral damage from the
excessive inflows and the subsequent massive capital reversals has been great, and could hardly be
justified in terms of some market-clearing or "tâtonnement" process. Whereas it seems hard to deny
that for every foolish borrower there had been a foolish lender, the response was to argue that there
had been a "shortage of liquidity" (i.e. people could not get out of their positions quickly enough!) or
deficient transparency (investors, by some extraordinary oversight, were unaware of cronyism,
corruption or lack of effective bankruptcy procedures).
For some, this response was part of the commercial imperative for maximising the return on
investments - if investors were seen to have been foolish, then this would reduce the chance of them
getting official assistance in repayment. At a risk of sounding cynical, it could be argued that the
loudest voices came from the representatives of financial markets, who not only saw commercial
advantage in continuing to open-up new markets, but for whom the experience of Mexico in 1994/95
was quite satisfactory, and required no modification - they achieved good returns (including a risk
premium) in good times, and they were bailed out - to a greater or lesser degree - in the bad times.
The free-market triumphalists found allies elsewhere. In academic circles, over the years,
considerable intellectual endeavour had gone into showing that markets are efficient - whatever the
convoluted and volatile path of financial prices over time, this is not only rational but indeed optimal
(see, for example, Garber (1990)). The rationale for any one participant in pushing the price further
away from its fundamental equilibrium was often along the lines of the "greater fool" presumption -
however artificially high the price, someone would pay more for it later.
So the first stage of the debate, following the crisis, had an almost surrealistic air about it, with the
IMF pressing at its Annual Meeting in Hong Kong at the end of 1997 to add capital account
deregulation to its mandate, at the very moment when the excessive inflows and reversals had been
shown to be so damaging.
The wider debate on globalisation is, of course, very relevant. One recent contribution (Friedman
1999) provides useful terminology. He talks of the "Electronic Herd" - the anonymous fund
managers behind their screens - and sees the proper response for emerging markets being to don the
"Golden Straitjacket" - whose specifications are a predominantly private-sector economy, balanced
budgets, low tariffs, and open capital markets, including unrestricted foreign investment. This sounds
very much like the "Washington Consensus", and as a framework of reference it makes good sense,
particularly if it accepts the feasibility (and indeed the desirability) of some adaptation to the local
environment, and acknowledges that there is more to a successful society than an identikit market
economy. Friedman acknowledges complexities and subtleties - indeed, his title (The Lexus and the
Olive Tree) emphasises the need to balance technology with tradition. And he does not confuse
inevitability with desirability, as the triumphalists do.
But two aspects - the inevitability of the process and whether the end-point is the pure free-market
model - require further comment. Some powerful forces clearly do encompass the globe in an
irresistible way - some reflecting superior technology; some reflecting the need for a common
standard; and some, the greater world integration through the communications revolution. There are
plenty of examples of "winner takes all" - a dominant player or technology. But there are just as
many examples of persistent national characteristics and behaviours. To imply that the whole package
of essentially-US systems and values has to be accepted holus-bolus over-simplifies the forces at
work.
Perhaps just as important, it would be a mistake to see these forces of globalisation attaching
themselves uniquely to a textbook competitive free-market model.4 Many aspects of globalisation are,
in fact, the opposite: a dominant technology, a winner-takes-all player or a set of market behaviour
rules such as the Basel Capital Adequacy Rules are hardly the world of atomistic competition of the
textbooks. Far from demonstrating Adam Smith's invisible hand, globalisation is occurring within a
complex set of rules, technical standards and regulations - some imposed by governments, but others
by technological imperatives or by the private players in markets.
This is not to suggest that the end-point should be the 19th century brand of capitalism foreseen by
some of the global triumphalists. "On the brink of the 21st century, the United States is at a point
reminiscent of its entry into the twentieth. ... Today, of course, the new frontier is the global
economy." (Zuckerman 1998, p. 20). Not everyone feels so warmly sentimental towards the age of
Robber Baron capitalism, and some may feel uncomfortable with the idea that "unimpeded access to
that burgeoning marketplace was the one indispensable condition for the flowering of American
enterprise" (ibid, p. 20).5
We need to ask, at the same time, whether the allocation decisions of the Electronic Herd make sense
from an economic viewpoint - are they shifting the capital (and the real resources it represents) to the
highest global usage? On recent performance, the answer would have to be "no". Leaving aside the
extraordinary volte face from optimism to pessimism in Asia (and the mis-allocated investment that
preceded the crisis), does the reassessment of US equity prices in 1987 (in the deepest market with the
fullest information) make sense? Or the gyration of the yen/US dollar rate, from 80 in April 1995 to
147 a couple of years later? Are markets, with their constant quest to respond to the latest data,
factoid, or rumour, the best allocators of capital and reliable guardians on the gateway to investment?
Have the umpires - the credit-rating agencies - been forward-looking and insightful in their
judgments? What should economies which did wear the Golden Straitjacket but were still subject to
speculative attack (e.g. Hong Kong) do? In short, should we be spending more analytical