Halting the tidal wave of deleveraging that has swept through the markets is paramount if policy moves to restore the financial system are to work, says Jonathan Wilmot, chief global strategist at Credit Suisse, as part of a report on the outlook for 2009.

“Since Lehman Brothers’ demise on the altar of moral hazard, deleveraging has become an overwhelming force”, he says. “Trillions of dollars of asset value have been destroyed, freezing credit markets as usable collateral and counterparty confidence evaporates, and sparking a near vertical drop in orders, production and confidence.”