The current downturn is different from anything that has occurred in the last 15 years. Policy makers are clearly worried. The UK's Finance Minister, Alistair Darling, told Bloomberg today that 'the effect of what has happened is going to be far more profound than people predicted at the start of the year'. He added that 'conditions have become much worse across the world'.
Noting that banks have already had to raise $324bn in new capital, Darling warned that `I don't think anyone would be wise to start speculating on how long the present difficulties will last. We are dealing with them here (in the UK), and other countries are dealing them as well. If you look at the problems the banks have had, they have moved into a different phase and governments have to take account of that.'