US banks on 'slow' recovery, Russian financial crisis seen

---

WASHINGTON, April 9 (AFP): The United States said yesterday it could begin to recover next year from prolonged recession as Germany reported its exports had slumped again and a top banker raised the specter of a Russian banking crisis.
Amid the sharp global economic downturn, market research firm Gartner Inc. warned that worldwide semiconductor revenue could face a "far worse" decline this year, and ratings agency Fitch lowered Ireland's sovereign credit rating.
The United States, among the earliest to enter recession following financial turmoil stemming from a home mortgage meltdown, could begin to grow again "slowly" next year despite numerous constraints, according to Federal Reserve projections.
"Real GDP is expected to flatten out gradually over the second half of this year and then to expand slowly next year," according to minutes of the central bank's policy-making Federal Open Market Committee (FOMC) in March.
It anticipated the recovery "as the stresses in financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end."
The United States plunged into recession in December 2007 after a home mortgage meltdown triggered financial crisis and slammed the brakes on growth.
The US Securities and Exchange Commission Wednesday began looking into rules to curb short-selling of stocks blamed for collapsing the shares of Wall Street firms last year.
The market-regulating SEC is considering five proposals to restrict investors from betting on a stock's decline at specific times, officials said. Short-selling involves borrowing stock and selling it in the hope that price declines.
The global downturn has hammered German exports, the key driver for Europe's biggest economy. The national statistics office said exports plunged a record 23.1 per cent in February, after a fall of 23 per cent in January.
In addition, a key German government advisor warned that Germany will contract by about 4.5 per cent this year, the steepest decline in output since World War II. The government's current forecast is for a 2.25 per cent contraction.
"The German Council of Economic Experts expects the economy to contract around 4.5 per cent this year," Wolfgang Franz, who chairs the council, told Dow Jones Newswires in an interview. Renewed concerns about Russia's banking crisis also dogged the markets Wednesday.