Jeune Street

Rome, Italy

The current global economic crisis seems to present world leaders with two options: develop better global economic (particularly financial) governance or throw up new national regulations. Given that the sources of the financial crisis were primarily global (rich country current account deficits, complicated financial instruments) it would stand to reason that a commensurate policy response is needed.

It's heartening to see that some of the brainy folks at Davos are getting this. The World Economic Forum's report on global risks hones in on gaps in global governance:

The other big risks highlighted in the report [included]... issues relating to natural resources and climate change, such as problems with the supply of food, water and energy.

John Drzik, chief executive of consultants Oliver Wyman, said one of the lessons of the financial crisis was the realisation of how interconnected global systems had become. He said this was equally important in all areas of risk in the modern world, including food, water and energy.

“We have now an opportunity to realise and look at other risks through the same lenses [as financial interconnectedness],” he said.