U.S. Federal Reserve Chairman Ben Bernanke, European Central Bank President Jean-Claude Trichet, and former central bank officials and head economists all met in Jackson Hole, Wyoming over the weekend, one year after the start of the financial crisis that has led to more than $500 billion in losses and writedowns, to discuss how to prevent such a collapse from reoccurring.
Unfortunately, it seems that an agreement could not be made on how to do so.
As noted in a speech at the end of the two-day conference, "it didn't settle a whole lot," Bank of Israel Governor Stanley Fischer said.
One of the main debates was how much responsibility for financial stability should be placed on the shoulders of the central banks, as well as how much help should be offered to struggling firms.
Trichet and Federal Reserve Governor Frederic Mishkin both defended the central banks and their results over the past year. Meanwhile, former Bank of England policy-maker Willem Buiter argued that the central banks' enthusiasm in assisting investors in trouble was "unhealthy and dangerous", and presented a paper saying that the Federal Reserve had been too quick to assist financial institutions.
Meanwhile, ECB Governing Council member Mario Draghi stressed that the additional responsibility of financial stability placed on the shoulders of monetary policy-makers could limit the latter's ability to control inflation.
Nevertheless, all participants were in agreement that a change in the system was forthcoming, despite not agreeing on its form.
One thing that all participants were united on was the fact that the crisis was not yet over and that ongoing turmoil was expected in both the housing and banking sectors.
"It was clear from what was said that most people here don't believe the financial crisis is necessarily over or close to being over," Fischer said in his closing speech.
By Todd Wailoo and edited by Nancy Girgis