Policies for financial system stability and the revival of credit Reactivating financial intermediation remains essential to get over the recession and return to lasting growth. The surrogate role played by central banks can only be temporary. Interventions in the United States and Europe last autumn (guarantees on deposits and bank securities) affected the liability side of bank balance sheets.
They prevented the collapse of the system, reviving some markets. Their usefulness is steadily declining, however; it is now urgent to proceed to new recapitalizations aimed at growth and interventions to support banks’ assets. The International Monetary Fund is now estimating that the losses of the world’s banks and other financial institutions total $ trillion; just five months ago, the estimate was $ trillion.