The dramatic drop in oil prices has put many more dollars in the pockets of businesses and individual consumers. No matter how dire economic prospects might appear, they’d be much worse if oil was still at $150 (unless of course you happen to be employed in the oil patch – this is a classic example of the same news being positive for some and negative for others.)

At one time, banks stood for prudence, risk management, oversight and transparency. It’s clear that too many banks got away from these principles – and also clear that we’re seeing a return to these traditional virtues that will ultimately leave the banking system stronger.

The challenges we’re facing today will test the leadership of all of the major economies … the good news is that it’s difficult to remember a time when we had leadership that was stronger  and more collaborative and open to new directions than we see today with Gordon Brown, Angela Merkel, Nicolas Sarkozy and Jean-Claude Trichet of the European Central Bank in Europe; Barack Obama, Ben Bernanke Tim Geithner, Paul Volcker and  Larry Summers in the United States;  and Hu Jintao in China and Manmohan Singh in India.  

The early response to Obama’s new administration is especially positive – as he and his team promise to boost confidence among American investors, consumers and businesses - confidence which has been sorely lacking over the recent period.

The sole exceptions to strong leadership among major powers are in Japan, which has suffered from a leadership vacuum since Junichiro Koizumi retired in 2006, and Vladimir Putin in Russia – while there is little question about his strength, his openness to new directions and willingness to collaborate is another question.

In the past, difficulties similar to today’s would have led to a fractured and fragmented global response. That’s a sharp contrast to the coordinated and cooperative response we’ve seen from central banks and the economic leadership in place today. Indeed, there appears to be a steadfast commitment to do whatever it takes to keep the financial system afloat and to provide the stimulus to get economic growth restarted.