Unusual problems require unconventional solutions. The world’s financial system is threatened by a new crisis that could be even worse than that of 2008. Investors’ recent turn against Italy and Spain created a panic in stock markets that were already nervous of a possible new economic downturn and the political impasse in the US. To counter this, the International Monetary Fund should establish a new “debt facility” to help indebted countries work out their finances.

The current crisis shows no signs of abating. The leaders of eurozone countries have done everything that in the present stage of monetary unification is politically feasible. The European Central Bank and US Federal Reserve are close to the limit of their capabilities. Resorting to debt reduction – an organised default – would help the respective countries but cause large losses for European banks, insurers and pension funds, with systemic risks comparable to those of Lehman’s failure in 2008.

The problem now exceeds the capabilities of developed countries. Yet it also threatens the growth of the world economy and therefore of emerging countries. In China, India, Brazil and other countries stock markets are also falling. But the largest surpluses are in the reserves of their central banks. We need new and effective measures to tackle the problem on a global scale.