Western Europe cradle of capitalism was also hit by the hurricane. Recession in W. Europe started from Iceland where a major bank supported by the Central Govt, faced a closure. Most of the Britishers held their accounts in this bank and the ripples were felt all round.
For the first time, some of the established financial institutions, major banks collapsed especially a monolith like the Lehman Brothers structure and many other similar institutions in USA and Western Europe. Unbridled capitalism with little centralised control played havoc with the world economies, and bankruptcy forced many to seek central bailouts.
The United States President Obama pledged to induct $ 787 billion to revive and stabilise the economy. Amidst this turmoil it transpired that the top bankers collected millions of dollars as bonuses.
This was unacceptable to the civil society and also to the governments of the day. In December, 09 the British govt, decided to levy an extra income-tax on the bonuses to curtail the amount being pocketed by the Bankers.
Fortunately, mid-level economies like Brazil, India, Indonesia, South Africa and other similar countries weathered the storm and stood on their own. The impact of the economic slowdown was felt but was not fatal. The presence of the regulatory authority and control mechanism prevented a total collapse. These economies, despite the global crisis, managed to grow at a lower rate of about 5 to 7 per cent per annum.
The eyes of the world turned to these developing countries and it was decided that since G-8 countries were the worst hit, efforts should be made to involve the group of G-20 to make a determined effort to bail out the world economy.
President Bush hosted the first G-20 meeting in late 2008 in Washington, Gordon Brown, British Prime Minister, hosted the next G-20 meeting in London in April, 2009 followed by a third meeting in Pittsburg USA in September, 09. The collective wisdom of these countries resulted in a draft plan to suggest ways and means by which the economic recession could be tackled.
In Dec. 2009, the British and the French govts, tired of the lavish bonuses awarded to the top bankers decided to impose a hefty 50 per cent tax on them. It was widely felt that many of the top banks could shift their operations to Shanghai or Mumbai. Japan meanwhile continues to be in recession, the govt, prepared a bailout package of $81 billion to revive trade and industry in Dec. 2009.