Ethos Issue 6, Jul 2009

Krugman, Wolf and the Roots of the Financial Crisis
The Return of Depression Economics and the Crisis of 2008
Author : Paul Krugman
Published by : New York, NY: W. W. Norton, 2008

Fixing Global Finance
Author : Martin Wolf
Published by : Baltimore, MD: Johns Hopkins University Press, 2008

Reviewed by He Ruimin

Second, in our drive to become a financial services hub, we have to maintain an active and forward-looking regulatory regime while avoiding overregulation. Risk Assessment and Horizon Scanning (RAHS) methodologies, predominantly employed for security risks today, may yield insights for financial regulation. Tighter regulation of domestic financial institutions by other countries may also affect Singapore’s attractiveness as a hub.

Third, while Singapore remains too small to generate sufficient domestic demand for our industries, the inability of the US to sustain current account deficits indefinitely suggests that we must constantly seek new export markets for our goods and services, without neglecting existing ones. Our capital investments must also continue to be diversified across geographical and asset classes, particularly in view of the heightened risk of a depreciation of the American dollar.

He Ruimin is a Research Economist in the Economics & Strategy Division, Ministry of Trade and Industry. A Naval Officer by training, he was formerly an Operations Officer on board the Singapore Navy frigate RSS Intrepid. He holds a PhD in Economics and a Bachelor’s degree in Electrical Engineering and Science, both from the Massachusetts Institute of Technology. The views expressed in this article are his own.

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