There are other countries that actually were running a surplus and had fairly responsible fiscal policies but had weaknesses similar to what happened here with respect to their housing market or the real estate markets, and that has weakened their financial system.
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Now for the real task: creating long-lasting stability in the financial system by tightening regulation and increasing capital for all banks.
Instead, we call on the regulators to revise the rule so that it accomplishes the goal of producing a safer financial system, and one that serves the real economy instead of preying on it.
Though the devaluation of Brazil's currency, the real, was widely anticipated, it nonetheless jolted the global financial system.
Our financial system was certainly very stressed, and there were real questions about what would be happening.
Since property accounts for so much of the financial system's aggregate balance-sheet, losses from real-estate busts are likely to be synchronised across banks.
"We have reached the scary point where the dysfunctional behavior of financial markets has destructive effects on the financial system and--much worse--on the real economies, " writes New York University economics professor and Forbes.com columnist Nouriel Roubini.
Because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system.
So, the recovery plan we passed is the first step in getting our economy back on track, but it is just the first step, because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system.
It began by raising the capital reserves its banks had to hold, in effect removing money from its financial system, and increasing the size of down-payments required to purchase real estate.
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Analysts say another week of plunging stock markets has focused minds and the real test of this weekend's scramble by world leaders to shore up the international financial system will come once markets reopen again on Monday.
"There are thousands of people facing the prospect of real hardship because they cannot find mortgage deals to re-mortgage onto, so unblocking the financial system I think is a very important step, " he said.
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