Ending the stock market panic

The liberal conservative daily Corriere della Sera sees generalised panic-mongering as the main reason why the stock markets have once again plunged: "We won't overcome the crisis until shares in the US start rising. … To make the markets liquid once more and rid them of panic-driven prices investors must make a comeback. In this respect the last two weeks of Obama policy have been disastrous. … The talk of nationalising Citigroup has caused its shares to dive by 22 percent. The fear of nationalisation in the US is triggered by different factors than in Europe, where people are wary of political influence. … In the US it is feared because state intervention in bank capital could thin out the previous shareholders and cause the value of their shares to plunge. … It's almost as if the Obama team simply refused to understand that the most important goal of the operations is not financial in nature. It's not about saving the banks' balance sheets - or at least not primarily, but about putting an end to the panic."

» full article (external link, Italian)
More from the press review on the subject » Fiscal Policy, » U.S.
All available articles from » Francesco Giavazzi

» To the complete press review of Tuesday, March 3, 2009