Wolfensohn Says ‘No Quick Fix’ for Global Economic Slowdown

(Bloomberg) -- The global economy will likely stay mired in a protracted slowdown, said James Wolfensohn, former World Bank President and chairman of Citigroup Inc.’s international advisory board.

“The debate will continue on whether it’s going to be a V, U or L-shaped recession,” Wolfensohn, who left the World Bank in 2005, said at a forum in Shanghai yesterday evening. “My own judgment is that it’s more likely the latter. I don’t believe we’ll get a quick fix any time soon.”

Wolfensohn’s views echo those of Nobel laureate Paul Krugman, who said this week in Shanghai he considered a V-shaped recession “extremely unlikely.” Retail sales in the U.S. unexpectedly dropped in April for a second month, according to the Commerce Department yesterday, indicating that rising unemployment is prompting consumers to conserve cash.

Nouriel Roubini, the New York University professor who predicted the financial crisis, said last week that analysts expecting the U.S. economy to rebound in the third and fourth quarter were “too optimistic.” He estimated a total of $3.6 trillion of loan and securities losses in the U.S.

Losses “won’t go as far as” Roubini’s estimates, said Wolfensohn, who was giving a talk in a restored building on Shanghai’s historic Bund.

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