At a time when many economists and central bankers are very worried about the risks to the international economy and monetary system, leading governments who alone could actually do something about it have buried their heads in the sand. That is the inescapable conclusion from the meeting of the G7 group of leading countries held in April in Washington. The communiqué was bland and avoided any discussion of systemic issues.

One problem, highlighted by Mervyn King, governor of the Bank of England