National governments have gone big. The IMF and World Bank need to do the same. My column with Gordon Brown in today's @washingtonpost
washingtonpost.com/opinions/2020/…
washingtonpost.com/opinions/2020/…
As @federalreserve & other central banks have expanded their balance sheets in previously unimaginable ways, the international community needs to do Mario Draghi’s famous phrase "whatever it takes" to maintain functioning global financial system. Here are 3 ways to do it.
First, the IMF, World Bank and regional development banks need to be as aggressive as the world’s central banks in expanding their lending. This means recognizing both that the current near-zero interest rate environment makes it possible to use more leverage.
Second, if ever there was a moment for an expansion of the international money known as Special Drawing Rights, it is now.
Third, it would be a tragedy & a travesty if stepped-up global financial support for developing countries ended up helping those countries’ creditors rather than their citizens. Country debts incurred before the crisis must be at the center of the international financial agenda.
Just as the pandemic can be contained most effectively and least expensively with early bold measures, the lesson from the past is that international recession and its consequent human cost is best addressed quickly and boldly. We must act fast and act together.
