Commentary: To stop the crisis, it takes more than a big summit

Source: Xinhua | 04-02-2009 12:59

by Xinhua writers Xu Xingtang, Wang Xiuqiong

BEIJING, April 2 (Xinhua) -- When world leaders arrive in London for an economic crunch summit Thursday, they will find themselves inundated by hectic media coverage and the global hopes for a panacea for the economic woes.

But those hopes will be chilled if the Group of 20 economies fail to have a clear picture of their policy and system pitfalls before they hustle to find solutions.

Despite the fact that the financial crisis originated from the burst of the U.S. housing bubble, authorities and economists have differed on the causes of the crisis. One of the most compelling arguments is that high savings by Asian countries like China helped fuel the U.S. property boom.

The view was supported by prominent U.S. figures, such as Federal Reserve Chairman Ben Bernanke. The Fed chief said in mid-March that, while the United States failed to effectively use massive capital inflows, its trading partners were also to blame for the global imbalances that were the fundamental causes of the financial crisis.

While Bernanke was brave enough to acknowledge the U.S. and other industrial countries lacked risk management and oversight of the financial sectors, he should have equal courage in revealing the root causes of the crisis -- including drawbacks in the U.S. policy and the current U.S.-dominated international financial system, instead of making wrong links between Asia's high savings and the U.S. overspending.