In fact, there is no inherent conflict between the G20 agenda’s objectives of a more stable financial system and of strong, sustainable and balanced growth. What we have to be careful with is public debt. The (sadly) new feature of the current crisis has been its third phase, the debt crisis, which hit us hard in May 2010.
Towards the end of 2009, investors and rating agencies were increasingly turning their attention to the financial risks that the government sector worldwide had already incurred or was likely to incur. The default risk of these countries’ government debt securities had until then been considered safe.