As the IMF meets in Washington this weekend, the economist Jacques Attali imagines a worst-case scenario unfolding for the global economy.
In April 2008, at a meeting of the interim committee of the International Monetary Fund in Washington, all of the world's financial and banking executives seem reassured. World markets have not collapsed. The banks seem to be withstanding the shock. World growth remains greater than 4 per cent. The executive director of the IMF summarises the world's frame of mind in his closing speech.
Admittedly, he explains, the financial system is somewhat more fragile than before the subprime crisis, but the crisis is under control. He explains that CDS - credit default swaps, or contracts between sellers and buyers that protect the buyers from credit risk - are very useful tools, despite the excesses of the preceding months. He declares reassuringly that this system has enabled, and will enable, enormous expansion of the worldwide economy.
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