WASHINGTON—Those looking for answers from this week's World Bank/IMF conference were presented only with more questions and vague reassurances that global policy leaders are acutely aware of the problems and prepared to act.
Nowhere was the inability to solve the debt crisis more readily apparent than at the G-20 news conference Friday.
Looked to for concrete vision on how the pending implosion in Greece could be contained, the session instead turned into a testy exchange between reporters and G-20 ministers, who preferred to talk more about protecting the global food supply than preventing another financial catastrophe.
"We have a method, a strategy, a calendar. Nothing else to add," Francois Baroin, the G-20's minister for the economy, finance and industry, said in response to one of several questions posed.
Baroin repeatedly referred the gathering media to a communique issued Thursday, itself a vaguely worded document that promised aggressive measures in the weeks ahead.
Somewhat fittingly, Baroin perpetuated the oft-used kick-the-can-down-the-road metaphor —utilized by critics to describe the global approach to the sovereign debtcrisis — by saying the issue would be broached again at the G-20's November meeting, which will be held, ironically, in Cannes.
"Each country, according to its situation, is taking measures," he said. "In terms of coordination, it is obvious that the response must be collective."
Reporters pressed on, though, and Baroin's frustration appeared to grow.
"I'm sorry there are no more questions on this afternoon's meeting," he said in reference to the Friday session that preceded the news conference. "Tonight I have no more answers besides what we did yesterday."
Finally, a session scheduled to last an hour was cut short after only 40 minutes or so, with no more light shed on when, if or how Greece will restructure its debt, despite a tumultuous week for financial markets that could have used a bit of certainty.
The G-20's lack of clarity could exact a price at a time when sentiment is growing that another full-blown financial crisis and global recession is at the doorstep.
Citigroup economist Steven C. Wieting said the US may be "a sitting duck" as it lacks the ability to respond to the European debt crisis, a situation he said is exacerbated by the lack of clarity from European leaders.
"Despite the latest assurances from the G-20, markets fear that government intervention steps, slowed by complex, decentralized political processes, could be taken too slowly to avoid increasingly dangerous developments," Wieting wrote in a research note. "Confidence in financial stability is unlikely to significantly recover until policymakers clarify the exact steps that will be taken to maintain it, at what cost, and to whom."
While hopes remain that the hit to the US from a Greek default yet could be contained, the stakes rise with each delay.
According to Wieting's calculations, the exposure to US banks could be less than 5 percent of tangible common equity.
But correlation—or the tendency of asset prices and even global economies to move in unison—has risen to new heights. According to Wieting's calculations, the correlation between the US and large European economies is at 70 percent. In other words, if Europe goes into recession, there is a strong chance the US will, too.
"There would be again no perfectly fair, equitable solutions in any steps taken to limit financial overspills of any sovereign default," Wieting said. "But in the absence of such actions, the world must live with the consequences."
European Leaders also will have to face consequences of inaction.
US policy makers, particularly Treasury Secretary Timothy Geithner, are pressing Europe to use the Lehman Brothers collapse, and the subsequent government actions, as a template for how to approach the Greece situation.
They are looking for a European version of the Troubled Asset Relief Program, or TARP, which helped recapitalize illiquid banks. Geithner is believed to favor the European Central Bank taking on a Federal Reserve -like role in becoming the lender of last resort for troubled institutions.
"European governments should work alongside the European Central Bank to demonstrate an unequivocal commitment to ensure sovereigns with sound fiscal policies have affordable financing, and to ensure that European banks have recourse to adequate capital and funding to win the full confidence of their depositors and creditors," Geithner told European leaders.
"The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally," he added.
Whether anyone will follow those suggestions, though, is a question left for another day.
The International Monetary Fund , World Bank and G-20 are near ready to break the meeting without a clear vision forward and only Thursday's communique as a blueprint.
"This is the strategy that's in place. That's the strategy that must function according to the timeline that must follow," Baroin said. "We want it to be efficient. For it to be efficient, first of all it has to be implemented. Today it is not yet."