Hot Docs: Global Banking Regulation Reforms Needed Urgently, McCaffrey on Afghanistan

Urgent Need for Global Banking Regulation Reforms: The regulation of the evolving and increasingly global financial markets must be updated and modernized, according to a private, nonprofit group of international bankers, economists, and financial experts. The Group of Thirty issued its report prior to a meeting of G-7 finance ministers and central bankers in Washington. Paul Volcker, chair of the group's board of trustees and former head of the U.S. Federal Reserve Board, says that the "financial turmoil that has unfolded over the last year has tested the ability of regulatory authorities to respond effectively to financial crises."

McCaffrey on Afghanistan: Retired Gen. Barry McCaffrey sees 2009 as a decisive year in Afghanistan, a country mired in misery with a life expectancy of just 44 and the world's second-highest maternal death rate. McCaffrey, now teaching at the U.S. Military Academy at West Point, shares his views in a recent report on his trip to Afghanistan. He notes that while 90 percent or more of Afghans reject the Taliban, they have little faith in their government's ability to provide the basics, such as clean water, electricity, security, and justice.

"Smart Support" for Georgia: Humanitarian aid to Georgia should be closely monitored and pegged to democratic reforms, a report by the Atlantic Council of the United States concludes. In addition, the report calls for the United States and the European Union to enter into a free-trade arrangement with Georgia and for an investigation into the causes of the war between Georgia and Russia and reports of atrocities.

Demystifying the Mortgage Meltdown: How did the U.S. housing market move from confidence to crisis so quickly? Milken Institute economists Glenn Yago and James Barth attempt to answer this question in a presentation at the economic think tank. Calling the word "meltdown" appropriate to describe the situation, they trace the mortgage crisis back to 2001 rate cuts by the Federal Reserve, which led to increasing debt and the commoditization of mortgage assets. Losses then began to snowball as "fear and uncertainty" swept the industry. As a future remedy, the two economists say that "modernizing and recapitalizing the U.S. financial system in this complex new era will be the key to ensuring the nation's competitiveness on a global basis." (The forum was held prior to the passage of the federal bailout bill.)

Reconciliation in Iraq: Saying that "a window of opportunity now exists for post-conflict reconstruction in Iraq," David Steele lays out a possible path to conflict resolution. Steele, an expert with the United States Institute of Peace who advises U.S. provincial reconstruction teams in Iraq, describes a process meant to foster forgiveness and reconciliation, thereby "breaking the cycle of revenge." To be successful, he says, negotiators must always remain cognizant of Iraq's culture and society, as well as the country's recent history, which has been "dominated by tension rather than unity, suspicion rather than trust, and dictatorship rather than democracy." Intermediaries will need to act locally as well as nationally, he says, because "at all points within a society, people and groups must be encouraged to work together constructively for the common good."