Global Sourcing. An International Procurement Strategy for the Emerging Markets of Eastern Europe and Asia

Germany would not authorize a guarantee as Ireland had. On Wednesday, the British government announced its own plan, a бё500 billion ($875 billion) program to shore up its banking system. Eight banks, including the Royal Bank of Scotland and HBOS, had initially agreed to participate in the program. The markets needed all the help we could give them. On Wednesday, in an unprecedented action, six central banks, including the Fed, the Bank of England, and the European Central Bank, all reduced policy interest rates. This was the first time in history that the Fed had coordinated a rate reduction with other banks; its federal funds rate target now stood at 1.5 percent. European markets briefly rallied, but U.S. stocks opened lower despite these moves. LIBOR-OIS spreads soared to 325 basis points from 289 basis points the day before. And we could see the problems spreading to the emerging markets: on Wednesday, IndonesiaБЂ™s stock exchange stopped trading after its main index fell 10 percent. Given the global sweep of the problem, I knew there werenБЂ™t going to be any silver bullets for solving it ...»