Executive Insight – Stronger but not immune

After months of burying their heads in the sand, markets and policy makers are waking up to the reality of a double dip in many mature economies. The logic of the recovery was quite simple: the massive bank bailouts, the fiscal stimulus and the monetary injections were supposed to provide temporary support to avoid depression while the deeper underlying causes of the crisis were addressed and resolved. The reality has been utterly disappointing. As soon as a timid recovery materialized in mid-2009, world leaders, financers and central bankers patted each other on the back, hailing the “green shoots of growth” in a self-congratulatory ritual. Hence difficult but unavoidable decisions were postponed day after day while the stock market was inflated by the liquidity injected by the United States Federal Reserve and, to a lesser extent, the European Central Bank. Once the ‘quantitative easing’ programs expired, stock markets lost steam, and