The financial-market turmoil triggered by the announcement that Dubai World may delay payments on $59 billion of debt is a reminder of how fragile the economic recovery is, said Angel Gurria, secretary general of the Organization for Economic Cooperation and Development.
The Dubai Financial Market General Index dropped 7.3 percent in its first day of trading after the government made the announcement last week, which sent European markets tumbling.
“Dubai is a reminder of how enormously fragile the recovery still is -- that we haven’t seen the end of the era of toxic assets -- that we haven’t finished the process of recapitalization of banks and that that banks still aren’t lending again in a normal way, and until they do, we won’t have a full recovery from the crisis,” Gurria said in an interview at a meeting of Latin American leaders in Estoril, Portugal.
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