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There was always going to be a second round to the financial crisis that has enveloped global markets over the last nine months. The first stage, which ended in March, was followed by a period of consolidation, often interpreted as a sign that the worst was over. The logic of the first stage was countered by the intervention of Central Banks, especially the US Federal Reserve, ensuring that short-term liquidity was shored up by securing huge amounts of bank debt. Even the investment banks have been brought under the umbrella of the Reserve for the first time.
However the success of the US Reserve strategy may be judged, that first stage was serious enough to ...