This makes me sleep a lot better…

November 15, 2011

Dear Warren,

On Nov. 11-12, I spoke at the Caixin Summit 2011 in Beijing on the subject of who will solve the debt crisis. My comments pertained to the euro area and to the rest of the world, and I stated that, in Standard & Poor’s view:

• External imbalances are as much at the root of the current crisis as fiscal imbalances;
• Better coordination among international policymakers can help to attenuate these external imbalances;
• Prior domestic economic reforms will facilitate coordination;
• Generally, a high level of financial claims is more of a symptom of past failures to reform than the disease itself;
• If international cooperation and economic reform come up short (which is not our base case), global growth could sputter, public and private sector indebtedness could remain high, and some speculative-grade sovereigns could resolve their fiscal difficulties through default.

Standard & Poor’s believes that what is taking place in the euro area, in several respects, is a microcosm of what is happening globally.

To read my full comments, please click here to access the article.

Please contact me with any comments or questions.
Sincerely,

John Chambers
Chairman of the Sovereign Ratings Committee