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Macklem’s boss, the late Jim Flaherty; Mark Carney, the Bank of Canada governor; and their counterparts from the Unites States, Japan, Germany, the United Kingdom, France, and Italy would declare that no other big bank would be allowed to fail as Lehman Brothers Holdings Inc. had a few weeks earlier.
That doesn’t sound like much anymore, considering the world’s major economies have spent hundreds of billions of dollars to keep their economies afloat during the pandemic. But back then, the G7 promise was considered an extraordinary intervention, especially after it was endorsed by the larger G20 soon after. “It was effectively suspending capitalism,” said Macklem. “It wasn’t a decision that anyone would take lightly and it wasn’t a decision that anyone could have imagined taking even a few weeks earlier.”
It was effectively suspending capitalism … it wasn’t a decision that anyone could have imagined taking even a few weeks earlier
Bank of Canada Governor Tiff Macklem
This moment in our conversation stood out because it demonstrated the biggest difference between the global crisis that we continue to endure and the last one twelve years ago.
It’s unlikely that veterans of the COVID-19 crisis will be holding onto memories from the international meetings they attended in 2020 as markers of important turning points. To be sure, images of global leaders talking over video link make for poor art, but the main reason is that the G7 and the G20 were nonentities in a year that saw the biggest global calamity since the Second World War. Those institutions exist for moments like these. It was embarrassing.