SINGAPORE (Dow Jones)--Recent events have left world leaders dazed, confused and scrambling to stop the bleeding in financial markets, though the efforts at coordination we are now seeing should provide markets with some modicum of comfort in the new week.
But even as they race to provide short-term solutions to systemic issues, officials need to keep in mind the longer-term result.
When the dust settles, it could prove to be a very different world. The question is, what kind of world do we want it to be?
The current situation argues for large-scale responses; now is not the time to be hesitant. It will perhaps take an arsenal of measures - many of them fiscal - to stop the hemorrhaging.
But decisions taken on the fly, especially complicated financial system ones which involve pointy derivative products, are also likely to have unintended consequences down the line (ah, benefit of hindsight, Mr. Greenspan?).
One would hope that even as finance ministries and central banks roll out the heavy artillery they also have some policy wonks parked in a back room, providing some advice and considering how these policies may impact markets and economies in two, five and 10 years from now.
In particular, they should heed the lessons from the Greenspan era, where too much money and too easy credit helped create the bubble which is now causing so much hurt.
Do we want a world with fewer banks and limited risk-taking ability? Do we want a world where banks are mostly owned by governments? Is nationalization a long-term solution?
Equally, do we want a world where we don't have to worry about our money - or even really think about it anymore - because governments will take care of that, too?
We know we want a world with greater transparency by banks and greater regulation and reporting requirements, but do we want a world where new investment instruments will no longer be created or where the ability to go out on a limb has disappeared altogether?
There are many such questions - and hopefully some people, somewhere, are thinking about them.
So far there's been no magic bullet to unlock global credit markets and get banks to start lending to each other.
But whilst the Group of Seven meeting on Friday didn't produce the kind of big-bang statement some would have liked, the statement of key principles should be taken as a roadmap for how governments will proceed going forward.
Europe is already taking that to heart, with euro-zone leaders agreeing late on Sunday on a plan that will allow member states to buy stakes in ailing banks and guarantee interbank lending.
That plan is now likely to be rolled out to the rest of the European Union; governments will come up with an amount of money to fund the plan between Monday and Wednesday.
In the U.K., meanwhile, we have reports that four big banks - including Royal Bank of Scotland and Lloyds TSB - are set to get an infusion of public funds.
In the U.S., Treasury is making progress on a plan to take direct equity stakes in banks to try and shore up their bottom-lines.
Other countries in turn, including Australia and New Zealand, are now guaranteeing all bank deposits.
These kinds of guarantees will engender some measure of confidence in the banking system and perhaps provide some breathing space for financial markets after the horror of last week.
That's because investors are very short-term in their outlook and actions right now.
It's up to governments and central banks to keep some longer term perspective.
