Obama blames US regulatory failure for global recession
Friday, 3 April 2009
From Fazle Rashid
NEW YORK, Apr 2: The inevitability of the global financial architecture being redrawn is becoming loud and clear. The United States has been the driving machine of the global economy. The global financial principle that the US will consume and the rest of the world will produce is perhaps ready for a burial.
President Obama acknowledged that regulatory failure in America was largely responsible for the global economic meltdown and promised the world leaders who have converged in London for an economic summit beginning today that US has " some accounting to do " to repair the damages.
He urged world leaders to focus on solutions rather than on placing blames and warned that the United States will not return to its role as a "voracious consumer market", the New York Times (NYT) quoted him saying.
Despite calls for unity, four major players in the global economy stood face to face. Anglo-US demand greater fiscal stimulus spending and France and Germany want more intrusive global regulation of financial institutions
Toxic bank assets were seen as the major instruments in current economic malaise. World leaders meeting in London today must act more decisively to clean up the toxic assets poisoning the global banking system or risk prolonging the worst global recessions in generation, a reputed paper quoted Dominique Strauss-kahn, the IMF managing director as saying. The IMF chief endorsed both the US view of more stimulus and European view of more regulations.
"The main thing we need now is to implement a sense of transparency where we can put a credible floor to bank losses," an expert commented.
Anti-capitalist demonstrators in London smashed their way into a branch of the Royal Bank of Scotland and vandalised its properties. The protestors called the bankers "thieves" and damaged computer, furniture and office equipment.
The protectionist threat is very real and if economic nationalism increase emerging markets have most to lose. France and Germany joined hands to call for a crackdown on tax havens. French president Nicolas Sarkozy fears China could become an obstacle. German chancellor Angela Merkel warned that she would not accept a half hearted communique on the issue.
The most talked-about event in London yesterday was a meeting described as G2 between US president Barack Hossain Obama and President of China Hu Jintao. The two leaders have agreed to work together to revive the collapsing global economy, strengthen financial system and establish a "strategic economic dialogue" the first meeting of which will be held in Washington later this year.
One of the few clear winners emerging from the policy mele around Group of Twenty (G20) meeting is the IMF which is in process of both acquiring a lot more money and making it the " lender of last resort " with its stricts lending conditions taking a temporary respite. China after being reluctant may finally agree to contribute to Fund's resources.
Asian Development Bank is trying to garner as much as $15 billion to help counter export slump through to 2013. Trade finance gap will dominate in today's meeting of G20. Robert Zoellick, World Bank president has already announced a $50 billion global trade liquidity programme.
On the political front, Palestine has warned the new Israeli government that refusal to continue serious peace talk intended to establish a separate Independent Palestine could spark fresh violence in the region. Robert Gates , US defence secretary said it is unlikely that Israel will launch an attack on Iran to prevent it from developing a nuclear weapon. Iran and US had a one to one meeting at the sideline of international meeting on Afghanistan.
NEW YORK, Apr 2: The inevitability of the global financial architecture being redrawn is becoming loud and clear. The United States has been the driving machine of the global economy. The global financial principle that the US will consume and the rest of the world will produce is perhaps ready for a burial.
President Obama acknowledged that regulatory failure in America was largely responsible for the global economic meltdown and promised the world leaders who have converged in London for an economic summit beginning today that US has " some accounting to do " to repair the damages.
He urged world leaders to focus on solutions rather than on placing blames and warned that the United States will not return to its role as a "voracious consumer market", the New York Times (NYT) quoted him saying.
Despite calls for unity, four major players in the global economy stood face to face. Anglo-US demand greater fiscal stimulus spending and France and Germany want more intrusive global regulation of financial institutions
Toxic bank assets were seen as the major instruments in current economic malaise. World leaders meeting in London today must act more decisively to clean up the toxic assets poisoning the global banking system or risk prolonging the worst global recessions in generation, a reputed paper quoted Dominique Strauss-kahn, the IMF managing director as saying. The IMF chief endorsed both the US view of more stimulus and European view of more regulations.
"The main thing we need now is to implement a sense of transparency where we can put a credible floor to bank losses," an expert commented.
Anti-capitalist demonstrators in London smashed their way into a branch of the Royal Bank of Scotland and vandalised its properties. The protestors called the bankers "thieves" and damaged computer, furniture and office equipment.
The protectionist threat is very real and if economic nationalism increase emerging markets have most to lose. France and Germany joined hands to call for a crackdown on tax havens. French president Nicolas Sarkozy fears China could become an obstacle. German chancellor Angela Merkel warned that she would not accept a half hearted communique on the issue.
The most talked-about event in London yesterday was a meeting described as G2 between US president Barack Hossain Obama and President of China Hu Jintao. The two leaders have agreed to work together to revive the collapsing global economy, strengthen financial system and establish a "strategic economic dialogue" the first meeting of which will be held in Washington later this year.
One of the few clear winners emerging from the policy mele around Group of Twenty (G20) meeting is the IMF which is in process of both acquiring a lot more money and making it the " lender of last resort " with its stricts lending conditions taking a temporary respite. China after being reluctant may finally agree to contribute to Fund's resources.
Asian Development Bank is trying to garner as much as $15 billion to help counter export slump through to 2013. Trade finance gap will dominate in today's meeting of G20. Robert Zoellick, World Bank president has already announced a $50 billion global trade liquidity programme.
On the political front, Palestine has warned the new Israeli government that refusal to continue serious peace talk intended to establish a separate Independent Palestine could spark fresh violence in the region. Robert Gates , US defence secretary said it is unlikely that Israel will launch an attack on Iran to prevent it from developing a nuclear weapon. Iran and US had a one to one meeting at the sideline of international meeting on Afghanistan.