G-7 announces plan to fight global financial crisis, which could dampen growth prospects in developing countries

 

G-7 announces plan to fight global financial crisis

www.chinaview.cn 2008-10-11 07:58:42  

·The G-7 agrees that the current situation calls for urgent and exceptional action. ·The G-7 will "use all available tools to prevent financial institutions failure." ·The G-7 will also take all necessary steps to unfreeze credit and money markets.

    WASHINGTON, Oct. 10 (Xinhua) --

Finance officials from the Group of Seven (G-7) announced here Friday a plan of action to battle the ongoing global financial crisis.

    "The G-7 agrees today that the current situation calls for urgent and exceptional action," said a statement released by the U.S. Treasury Department announcing the plan of action.

    "We commit to continue working together to stabilize financial markets and restore the flow of credit, to support global economic growth," it said.

    According to the statement, the G-7 will "take decisive action and use all available tools to support systematically important financial institutions and prevent their failure."

    The world's seven major economies will also take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.

    It will "ensure that our banks and other major financial intermediaries, as needed, can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses."

   Meanwhile, member of the group will ensure that "our respective national deposit insurance and guarantee programs are robust and consistent so that our retail depositors will continue to have confidence in the safety of their deposits."

    In addition, the G-7 will "take action, where appropriate, to restart the secondary markets for mortgages and other securitized assets."

    The plan of action was announced after G-7 finance ministers and central bank governors met here Friday before the annual meetings of the International Monetary Fund and its sister institution World Bank.

    The G-7 meeting, which brought together financial officials of the United States, Germany, Japan, France, Britain, Italy and Canada, was held amid a stunning loss of confidence in the global financial system that has sent markets into a freefall.

    "The actions should be taken in ways that protect taxpayers and avoid potentially damaging effects on other countries," the statement said, adding that "we will use macroeconomic policy tools as necessary and appropriate."

    "We will strengthen further our cooperation and work with others to accomplish this plan," the G-7 pledged.

G-24: global financial crisis could dampen growth prospects in developing countries

www.chinaview.cn 2008-10-11 06:16:49  

    WASHINGTON, Oct. 10 (Xinhua) --

A group of developing countries warned here Friday that the ongoing global financial crisis could dampen growth prospects in the developing world.

    "Many emerging markets and developing economies are not immune to the spillovers of the ongoing global crisis, with some countries more affected than others," said the group of 24 countries (G-24) from Latin America, Asia and Africa in a communique following their meeting.

    They expressed concern about financial contagion spreading to several emerging market economies in the form of reversals in capital inflows, increased funding costs, and shifts in investor sentiment unrelated to fundamentals.

    In the communique, the G-24 noted that the world economy is facing its most difficult situation in years, against the backdrop of a deepening financial crisis that originated in mature markets.

    "Advanced economies are slowing markedly and some are already in recession," it said, adding "continued strained financial conditions will dampen global growth prospects."

    It called for a comprehensive international response to address the strains in financial markets and restore market confidence.

    In order to help reduce developing countries' vulnerability to crisis, including from contagion, the G-24 saw the need to move expeditiously to put in place new instruments to help prevent or deal with crises.

    "The introduction of a liquidity facility is long overdue," it noted, calling on the International Monetary Fund (IMF) to establish a new liquidity instrument well before the 2009 spring, based on work outlined by the IMF and further proposals by member countries.

    Meanwhile, the G-24 underlined the need for the international community to assist the poorest developing countries to cope with these shocks through stepped-up assistance.

    "Joint multilateral efforts and active policy coordination will be crucial to deal with these crises and avoid a protracted deterioration in financial and economic conditions in the world economy," the group stressed.

    The G-24 was established in 1971 to coordinate the positions of developing countries on international monetary and development finance issues and to ensure that their interests were adequately represented in negotiations on international monetary matters.

    They met Friday before the annual meetings of the IMF and its sister institution World Bank.

Editor: Yan

 

 

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