Global response to credit crunch to be discussed
Wednesday, 8 October 2008
FE Report
The world's central bankers and finance ministers gather in Washington October 10-13 to discuss a global response to the credit crunch amid the worst financial crisis to hit advanced economies since the 1930s.
Sandbagged by three successive shocks-high commodity prices, the housing slump in the United States and a number of other advanced economies, and the growing financial crisis-the global economy is forecast to slow dramatically, said a press release of the International Monetary Fund (IMF).
In addition to assessing the health of the international economy, world financial leaders are expected to consider ideas for reforming the underlying rules and regulations of global finance.
"There is a deeper structural issue to be resolved. This crisis is the result of regulatory failure to guard against excessive risk-taking in the financial system, especially in the US We must ensure it does not happen again," said IMF Managing Director Dominique Strauss-Kahn.
With the demise of some of the most famous names on Wall Street, the credit crisis has marked a tectotic shift in the US financial system, which demands a comprehensive, internationally coordinated response. "The reality of financial globalization means that policy interventions-including the longer-term issues of regulatory and supervisory reforms-need to be globally coherent and consistent in order to be effective," said IMF First Deputy Managing Director John Lipsky.
The world's central bankers and finance ministers gather in Washington October 10-13 to discuss a global response to the credit crunch amid the worst financial crisis to hit advanced economies since the 1930s.
Sandbagged by three successive shocks-high commodity prices, the housing slump in the United States and a number of other advanced economies, and the growing financial crisis-the global economy is forecast to slow dramatically, said a press release of the International Monetary Fund (IMF).
In addition to assessing the health of the international economy, world financial leaders are expected to consider ideas for reforming the underlying rules and regulations of global finance.
"There is a deeper structural issue to be resolved. This crisis is the result of regulatory failure to guard against excessive risk-taking in the financial system, especially in the US We must ensure it does not happen again," said IMF Managing Director Dominique Strauss-Kahn.
With the demise of some of the most famous names on Wall Street, the credit crisis has marked a tectotic shift in the US financial system, which demands a comprehensive, internationally coordinated response. "The reality of financial globalization means that policy interventions-including the longer-term issues of regulatory and supervisory reforms-need to be globally coherent and consistent in order to be effective," said IMF First Deputy Managing Director John Lipsky.