But the US has lots of company, the UK has been in recession for several months now, and within the last two weeks, Germany and Japan announced that they were also in recession. Governments all over the world have been implementing policy actions to address the root cause of the financial stress and to support global economic recovery.
The initiatives have included programmes to purchase distressed assets, use of public funds to recapitalize banks and provide comprehensive deposit guarantees and coordinated reductions in policy interest rates by major central banks. Market conditions are starting to respond to these actions. Interbank lending is slowly reappearing and the major banks are beginning to lend again, though still at very high interest rates.