Countries Move to Stimulate Economy

England and the European Central Bank are both expected to make cuts but other countries may be more reluctant.

The Bank of Japan already has its key interest rate at 0.5 percent. The central bank confirmed today, as expected, that it would leave the interestrate unchanged. Given that country's 2 percent inflation rate, the rate is essentiality negative.

David R. Kotok, co-founder and chief investment officer of Cumberland Advisors, said such cooperation "will send some psychological message."

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"It really is not needed," Kotok wrote in an e-mail. But "each of them will cut anyway, so we will see serial cuts in close proximity."

Mike Ryan, head of wealth management research, Americas at UBS, said that the United States and other countries, so far, have taken a "parochial approach" to addressing the financial crisis by addressing it on a "local level."

"The approach is an almost exclusively done, on a country by country, event by event basis," he said.

Ryan said that, instead, the G8 countries should be working together to address the financial crisis with a "global approach."

That should include, he said, but not be limited to a coordinated effort to cut rates by the different central banks, including the European Central Bank, which has yet to cut rates recently because of inflation concerns.

"We are hopeful that what we'll start to see is some measures put in place that will send some signals that global policymakers are going to work in tandem," Ryan said.

Gerald P. O'Driscoll Jr., a former vice president of the Federal Reserve Bank of Dallas and Citigroup, also questioned the need by some countries to make a cut.

"What are the Japanese going to do? I guess they can go back to zero, which they are very reluctant to do," O'Driscoll said. "The Europeans have the most scope for cutting."

While the U.S. Federal Reserve has its main rate at 2 percent, O'Driscoll said in recent days the Fed has put so much cash into the banking system that it has essentially already pushed rates lower in the marketplace.