The first hypothesis is that a capital overhang, caused by excessive investment during the previous boom, held back the recovery in capital spending. While it is difficult to measure excess capital, the Federal Reserve Board staff estimates that any broad-based capital overhang was probably eliminated early in the recovery.
The Bank can contribute positively to the promotion of more liquid and integrated carbon markets and help clients reap the gains that will result from an increased demand for environmental protection. As regards energy efficiency, we believe that policy dialogue has the potential to generate benefits for both industrialized and developing countries.