Saturday, September 27, 2008

Wall Street: A Blow to U.S. Prestige?

Not really.
Compared to any other country, we're a marvel at response and action.

The boulevards of Paris are a pretty reliable place to troll for anti-American sentiment. And sure enough, self-described anarchist Bernard Barbry is happy to weigh in with his opinion of the U.S. financial system. "The banks have brought this on themselves, and they deserve what they get," says Barbry, out for a stroll on a busy street in southwestern Paris. Surprisingly, though, the retired journalist isn't predicting America's downfall. The U.S., he believes, will remain powerful, and the crisis on Wall Street won't affect Washington's influence on world affairs. "I like Americans," he says.

In some areas, Wall Street's comeuppance is a plus: It vindicates Europe's less profitable—but less risky—banking practices. Either because they were more prudent or because regulators tied their hands, the likes of Germany's Deutsche Bank and Spain's Banco Santander look strong. But Deutsche CEO Josef Ackermann isn't writing off his American rivals. "I wouldn't bet against U.S. banks," he says in an e-mail. "It's still unclear who the winners of this crisis will be."....
It's important to remember that in much of the world, crises are met with parliamentary dithering at best, or at worst opaque decision-making by an unaccountable elite. So among foreign bankers and citizens alike there is admiration for the way Treasury Secretary Henry Paulson tossed out decades of Republican free-market dogma and pledged hundreds of billions of dollars to rescue the banking system. "The speed with which America has moved over the past 8 to 10 days is truly phenomenal," says Uday Kotak, vice-chairman at Mumbai's Kotak Mahindra Bank. "I don't think any other country could have done that."  MORE.... 


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