Given the strong interactions between financial markets, financial institutions and the real economy, ensuring normal functioning of markets assumed critical significance. The financial markets - in particular the stock market, the money market and the forex market – reflected the heat of the global contagion.
The ongoing deep recession, however, is forcing a rethink of the present strategy for ensuring the sustainability of general government finances in the future. In the context of increasing indebtedness, expenditure growth and a decline in the output level , the capacity of general government finances to meet the expenditure and other pressures of population ageing is much weaker than earlier anticipated.