U.S. bailout is a start to prevent a financial crisis and recessions worldwide
(From The Japan Times Oct. 5 issue)

米金融救済法は世界不況回避の出発点

The U.S. House of Representatives on Oct. 3 passed a revised bill to rescue ailing financial institutions following the Senate's approval Oct. 2. (The House had defeated the original bill Sept. 29.) U.S. President George W. Bush quickly signed the bill into law. It allows the U.S. government to spend up to $ 700 billion to buy up bad mortgage-related securities and other devalued assets held by financial institutions. It is expected to ameliorate the current financial crisis and prevent a calamitous blow to the U.S. economic system.

Still, central banks and governments of the United States and other major economies need to coordinate their actions to prevent the financial crisis from triggering simultaneous recessions worldwide. The International Monetary Fund said in its biannual World Economic Outlook, "The financial turmoil that began in the summer of 2007 has mutated into a full-blown crisis."

Financial institutions have grown suspicious of each other's creditworthiness and have struggled to borrow funds in money markets. If more of them refuse to extend new loans to businesses or start demanding payment of outstanding loans, the resulting credit crunch could bankrupt even good-performing firms.

The financial crisis has cast a chill in the minds of consumers and executives, threatening to cause a contraction of economic activities overall. In Japan, for example, large manufacturers' business confidence has dropped for four straight quarters. Their diffusion index — the percentage of firms reporting favorable business conditions minus the percentage of those reporting the opposite — stood at minus 3 in September, dipping below zero for the first time since June 2003. About 80 percent of the firms responded to this survey before the Sept. 15 collapse of Lehman Brothers Holding Inc. The United States saw September auto sales drop by 26.6 percent from the same month a year before. Unit sales dipped below 1 million for the first time in 15 1/2 years.

Leaders of the major economies should meet soon to discuss how to put their respective rescue measures to the most effective use so that trust is restored in financial markets. Without a return of confidence, more people and businesses will suffer.

米上院に次いで下院は10月3日、金融救済法案の修正案を可決した（下院は9月29日に当初案を否決）。政府は公的資金最大7千億ドルで金融機関の不良資産買い取りが可能となった。

アメリカをはじめ、主要経済大国の中央銀国、政府は連携して世界同時不況を回避しなければならない。金融機関同士の信用収縮で企業への貸し渋り、貸し剥がしが増えれば、健全企業の倒産を招く。

金融危機で消費者や企業の心理が冷え込み、全体的な経済活動収縮が起きる恐れがある。日本の大手製造業の景況感は9月調査でマイナス3と2003年6月以来のマイナスに転じた。米の新車販売台数は前年同月比26.6％減、15年半ぶりに100万台を割った。

主要経済大国指導者らは金融市場の信頼を回復させることを目指して早急に話し合うべきだ。