Public or private, excessive debt must eventually be lanced

JEREMY WARNER

Nations are invited to work hard on developing credible "exit strategies" from the extreme fiscal, monetary and financial sector support which has been applied over the last year.

Controls on bank bonuses, leverage and much tougher capital requirements have also been agreed in principle, though the paucity of detail is symptomatic of marked differences in approach to these matters.

Yet, by common agreement, none of this commitment to donning the hair shirt is to be implemented any time soon, for fear it would disrupt the still fragile economic recovery. The idea is rather to convince markets that everything is under control – that when the time is appropriate, after the economic recovery has become self sustaining, the necessary action will be taken to unwind today's potentially toxic mix of easy money and burgeoning public debt.

Public or private, excessive debt must eventually be lanced

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