Market interest in global imbalances waxes and wanes but the economic facts do not change. The US current account deficit is unsustainable in the long run. To reduce it to manageable proportions by means other than a global recession will require macroeconomic policy changes on the part of surplus countries as well as the US itself. These will have to be accompanied by big shifts in real exchange rates to alter the relative prices of imports and exports, traded and non-tradeable goods, even though exchange rate moves in isolation will not do the trick. The question is how to get from the current equilibrium, which rests on imbalances, to a more durable one.

To some this cries out for formal international policy co-ordination, along the lines of the 1985 Plaza accord. Today's version would include Asian economies agreeing jointly to revalue against the dollar. But Alan Greenspan, former chairman of the Federal Reserve, told the FT Asian Financial Centres summit yesterday that this is both "unlikely" and "probably ill-advised".