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Finance sector 'gradually recuperating'
The financial sector is gradually recuperating from the global economic crisis on the back of increasing confidence that government and central banks are prepared to act, according to the chief economist of major US institution Bank of New York Mellon, Richard Hoey.
Hoey has used his latest economic update to predict that, as a result of this increasing confidence in the finance sector, a recession trough will occur around the middle of this year followed by a sub-par economic recovery.
However, he said he agreed with the view that the current situation represented the greatest global financial crisis since the Great Depression.
“The global economy was in free fall in the fourth quarter of 2008 and this should continue in the early months of 2009. This has created fears of a global depression,” Hoey said.
“However, we expect a severe global recession rather than a depression,” he said. “The key to our view is that policymakers have a correct diagnosis of the severity of the financial crisis and should continue to be proactive in responding aggressively to this.”
Hoey said, however, that even after the recession was over he did not expect a strong economic rebound and, instead, expected a sub-par recovery, particularly in the initial phases.
AUTHOR
Mike Taylor
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