G-7 business leaders caution against over-regulation
Sunday, 19 October 2008
From Fazle Rashid
NEW YORK, Oct 18: The business leaders from G7 nations who met in Paris ahead of a crucial meeting in Washington today made a passionate plea for not to jettison market economy in a bid to repair the incalculable damage wrought on the global economy because of reckless and irresponsible lendings by the major financial institutions.
The heads of the business federations from Germany, France, US, UK and Italy huddled together to issue a common response. US president George Bush, French president Nicolas Sarkozy and European Commission president Manuel Barroso will sit in Washington today to find out ways and means to reform , rebuild and rehabilitate the global economy so severely bruised by the recent tempest hitting the global financial markets.
Redesigning, what is now being called the world's financial architecture, will take the centre stage at the meeting. The International Monetary Fund ( IMF ) is set to go through an overhauling. The chorus for more controls and regulations is renting the air in Wall Street and Washington in the wake of financial debacles. The business leaders fear that the governments in the face of being blamed for total inaction would be badgered to over-regulate bordering on protectionism. The business leaders of the G7 nations stoutly defended free trade and a global market economy as the sole means to ensure economic growth.
Free trade exists only conceptually. The produce from the developing economies are being denied entry into the markets of the industrialised nations. Huge subsidies make trading impossible . Although the market economy is messy and sometimes extravagant, we know it is by far the best system for allocating resources around the world raising prosperity, head of Britain's employers group was quoted as saying.
Another said ' history shows that growth comes from free trade, from giving space to people to innovate'. He went on to say we must not weaken our companies. What happened was not the fault of the liberal market which needs rules which were absent, he asserted. The government intervention to stabilise the banks should a temporary phase not a permanent feature another business leader said..
The IMF came in for a dressing down and the market watchers supported the move for reform of the Fund. IMF was a mute witness, it did not play a role during the crisis a researcher said. Donald Shepard, the president of the US chamber of commerce warned to avoid a knee-jerk reaction and said "it does make sense to look at the way we deal with things from regulatory point of view." Over regulation or any attempt to increase taxes on companies to fund the rescue plan would simply exacerbate the adverse economic consequences, he opined.
The US chamber chief said 'Today we are in recession, perhaps not in an academic sense, but the companies in all our countries are cutting staff, reducing investment, questioning research spending. We are at a low point in the economic cycle.' Business leaders urged governments to make sure that the global banking system did not retreat into a risk averse mentality.
US consumer confidence has fallen steeply in October prompting fears about consumer spending. It could send the economy into a deep recession. People are terrified and this will have a big impact on spending. The banks are cutting on consumer credit in the face of people struggling to ends meet. A hedge fund manager who earned windfall gains bowed out of the business saying 'the idiots running big banks.' Andrew Lahde who has made millions of dollars made damaging comments about the policy planners and managers. He said 'These people who were (often) truly not worthy of the education they received rose to the top of companies such as AIG and Lehman Brothers and all levels of our government'. President Bush is an MBA from Yale.
Corruption, underhand and shoddy deals continue to plague the financial market even the squall is not yet over. Groupe Caisse d'Epargne, France's third largest bank announced it had sustained loss totalling $805 million because of a trading scandal.
NEW YORK, Oct 18: The business leaders from G7 nations who met in Paris ahead of a crucial meeting in Washington today made a passionate plea for not to jettison market economy in a bid to repair the incalculable damage wrought on the global economy because of reckless and irresponsible lendings by the major financial institutions.
The heads of the business federations from Germany, France, US, UK and Italy huddled together to issue a common response. US president George Bush, French president Nicolas Sarkozy and European Commission president Manuel Barroso will sit in Washington today to find out ways and means to reform , rebuild and rehabilitate the global economy so severely bruised by the recent tempest hitting the global financial markets.
Redesigning, what is now being called the world's financial architecture, will take the centre stage at the meeting. The International Monetary Fund ( IMF ) is set to go through an overhauling. The chorus for more controls and regulations is renting the air in Wall Street and Washington in the wake of financial debacles. The business leaders fear that the governments in the face of being blamed for total inaction would be badgered to over-regulate bordering on protectionism. The business leaders of the G7 nations stoutly defended free trade and a global market economy as the sole means to ensure economic growth.
Free trade exists only conceptually. The produce from the developing economies are being denied entry into the markets of the industrialised nations. Huge subsidies make trading impossible . Although the market economy is messy and sometimes extravagant, we know it is by far the best system for allocating resources around the world raising prosperity, head of Britain's employers group was quoted as saying.
Another said ' history shows that growth comes from free trade, from giving space to people to innovate'. He went on to say we must not weaken our companies. What happened was not the fault of the liberal market which needs rules which were absent, he asserted. The government intervention to stabilise the banks should a temporary phase not a permanent feature another business leader said..
The IMF came in for a dressing down and the market watchers supported the move for reform of the Fund. IMF was a mute witness, it did not play a role during the crisis a researcher said. Donald Shepard, the president of the US chamber of commerce warned to avoid a knee-jerk reaction and said "it does make sense to look at the way we deal with things from regulatory point of view." Over regulation or any attempt to increase taxes on companies to fund the rescue plan would simply exacerbate the adverse economic consequences, he opined.
The US chamber chief said 'Today we are in recession, perhaps not in an academic sense, but the companies in all our countries are cutting staff, reducing investment, questioning research spending. We are at a low point in the economic cycle.' Business leaders urged governments to make sure that the global banking system did not retreat into a risk averse mentality.
US consumer confidence has fallen steeply in October prompting fears about consumer spending. It could send the economy into a deep recession. People are terrified and this will have a big impact on spending. The banks are cutting on consumer credit in the face of people struggling to ends meet. A hedge fund manager who earned windfall gains bowed out of the business saying 'the idiots running big banks.' Andrew Lahde who has made millions of dollars made damaging comments about the policy planners and managers. He said 'These people who were (often) truly not worthy of the education they received rose to the top of companies such as AIG and Lehman Brothers and all levels of our government'. President Bush is an MBA from Yale.
Corruption, underhand and shoddy deals continue to plague the financial market even the squall is not yet over. Groupe Caisse d'Epargne, France's third largest bank announced it had sustained loss totalling $805 million because of a trading scandal.