Restoring stability to the banking system is a necessary but, on its own, not a sufficient condition for restoring health to the economy. I will conclude by commenting on the other key policy challenges of restoring competitiveness and stabilising the public finances.
Financial market turbulence evolves into a crisis The events of last September, centring around the failure of Lehman Brothers, were seminal, after which governments and central banks everywhere had to intervene in an unprecedented way and on a scale that was not conceivable beforehand. Beginning in September, global interbank markets increasingly seized up, even at the very shortest maturities.