``The year 2011 proved a major setback for the view that policymakers had global debt crisis dynamics under control.  Indeed, I would argue that the European sovereign debt crisis provided a historical inflection point with respect to the capacity for fiscal and monetary policy intervention to hold the downside of a Credit bust at bay.  I expect circumstances in 2012 to confirm this dynamic of waning policy efficacy, but on a more global basis.  Last year, markets witnessed how policy moves in Europe too often came with unintended consequences.  The ECB's LTRO facility has shifted sentiment back in favor of central bank policy power and effectiveness.  But for how long?''

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