The co-ordinated move by five central banks to shore up confidence in the world’s frozen money markets is not the first piece of international co-operation to fend off a financial crisis.
There have been several combined efforts in the currency markets, such as the 1985 Plaza accord when five governments agreed to push the dollar lower to reduce America’s current account deficit and lift the world’s largest economy out of the recession of the early 1980s.
It is, however, one of the biggest joint efforts so far, and the first major intervention of its kind since the September 11 terrorist attacks in 2001. The simultaneous initiative was designed to have maximum impact, to be greater than its parts, which are in fact quite different local initiatives.
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