Comment, analysts and other offerings from Monday’s FT,
Editorial comment: A minute before midnight for banks
The banking system of the western world is suffering the equivalent of a cardiac arrest. It is now virtually impossible for any institution to finance itself in the markets longer than overnight. This is a measure of the panic-stricken collapse in confidence that has seized the system. It also demonstrates the challenge that confronted G7 policymakers at their weekend meeting in Washington. Did they meet it? At the level of intentions, yes. But, at the level of action, no. Detailed plans of action are required. Otherwise, the world risks a lethal banking collapse..
George Soros: How to capitalise the banks and save finance
Now that Hank Paulson has recognised that the troubled asset relief programme is best used to recapitalise the banking system, it is important to spell out exactly how it should be done. Since it was not part of the Treasury secretary’s original approach, there is a real danger that the scheme will not be properly structured and will not achieve its objective. With financial markets on the brink of meltdown it is vital to make the prospects of a successful recapitalisation clearly visible.
Lex: Is it time to buy?
With stock markets falling day by day, investment gurus suggest it is time to buy – taking a 30-year view. Certainly, there are plenty of companies across the developed world in little immediate danger and trading at eyewateringly low prices. But there is no telling how long a market recovery could take. The Dow took 24 years to regain its pre-crash highs following the Great Depression. Japanese equities are still a quarter of what they were almost 20 years ago. For many, that will be too long a wait.
Analysis: The Lehman crash – catalyst of the crisis
FT reporters examine how the sudden death of the 158-year-old bank turned an upheaval into a global panic
John Gapper: The end of big bonuses?
Gordon Brown is not the only politician to demand restraint from bankers in return for taxpayers’ cash. The uproar that has followed announcements of bail-outs in the US, UK and elsewhere has led to politicians telling bankers off like schoolchildren.
Comment: The shocking errors of Iceland’s meltdown
The US authorities’ decision to let Lehman fail will be severely criticised by financial historians – the next generation of Bernankes, says Richard Portes, professor of economics at London Business School. That precipitated the current acute financial crisis – and one of the many vicious circles in this crisis ensnared Iceland’s banks.
Monday Q&A: Currency markets
Hans Redeker, head of FX strategy at BNP Paribas, will answer readers’ questions on Monday afternoon GMT about the financial crisis and its impact on currencies and forex markets. Post a question now
Videos:
View from the markets: Tim Bond, Barclays Capital: UK bank rescue plan
The UK’s bank rescue plan is not a global solution, but it is the most comprehensive solution we have yet seen, says Bond, Barcap’s head of asset allocation.
The US Daily View: The week from hell
John Authers examines one of the worst week on record for capital markets.
FT-Goldman Sachs Book Award
The Business Book of the Year will be selected on Tuesday, winning the author £30,000. See the shortlisted six and read excerpts.