Larry Summers - Caricature (DonkeyHotey/Flickr CC)April 6, 2015 (Bloomberg) -- In a new column, former Treasury Secretary Larry Summers delivers a scathing message (emphasis ours):
"This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system. True, there have been any number of periods of frustration for the United States before, and times when American behaviour was hardly multilateralist, such as the 1971 Nixon shock, ending the convertibility of the dollar into gold. But I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the United States to persuade dozens of its traditional allies, starting with Britain, to stay out of it."
Summers is referencing the new Asian Infrastructure Investment Bank, China’s 18-month-old plan to start the first new multilateral development lender in decades. More than 40 countries applied to be founding members including China, Australia, Egypt, Ukraine, the U.K., France, Switzerland, India, and South Korea.
Mohamed El-Erian voiced similar concerns in a Bloomberg View column late last month.
