Tags: Roach | World | Coordinated | Policies

Morgan Stanley’s Roach: World Needs More Coordinated Policies

Wednesday, 30 Nov 2011 08:40 AM

Global leaders need to coordinate economic policies better instead of acting on their own and ignoring the consequences of their actions, says Stephen Roach, Morgan Stanley Asia's nonexecutive chairman.

A lack of such coordination is threatening the global economy.

"I think the idea that countries and regions can make policy independent of what else is going on in the world is pretty ludicrous, and yet we still seem to be presuming the best global policy is the arithmetic sum of some national policies. That's not working too well," Roach tells CNBC.

The world has battled 11 major financial crises since the 1980s, including the Latin American debt crisis, the U.S. subprime meltdown and now the European calamity, Roach says.

"Somehow we have to figure out a better way to run this integrated, increasingly connected global economy of ours, and we just keep fumbling the ball, not just in the U.S., not just in Europe," Roach says.

"The global architecture is missing here."

Multilateral lending institutions such as the International Monetary Fund and the World Bank should assume more leadership.

"Are they followers or leaders?" Roach asks.

"The IMF is basically silent."

The OECD, a Paris-based economic group, says policy makers around the world must act in unison and flood the global economy with liquidity via asset purchases and interest rate cuts.

"The weak prospects for the euro area economy and fading inflation strongly argue for further prompt reductions in interest rates," the OECD says in a recent report, according to Reuters.


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Global leaders need to coordinate economic policies better instead of acting on their own and ignoring the consequences of their actions, says Stephen Roach, Morgan Stanley Asia's nonexecutive chairman. A lack of such coordination is threatening the global economy. I...
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Wednesday, 30 Nov 2011 08:40 AM
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