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 [分享]This maybe the reason for reversal. As I expected before |
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[分享]This maybe the reason for reversal. As I expected before -- theoretical - (2441 Byte) 2008-10-11 周六, 06:17 (1507 reads) |
theoretical
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作者：theoretical 在 谈股论金 发贴, 来自【海归网】 http://www.haiguinet.com
G-7 Meets on Crisis as Italy Splits Over `Weak' Draft (Update1)
By Simon Kennedy and Flavia Krause-Jackson
Oct. 10 (Bloomberg) -- Finance ministers and central bankers from the Group of Seven nations met for crisis talks in Washington amid an unprecedented public split over what to say in their joint statement.
The draft communiqué under consideration is ``too weak'' and fails to reflect the gravity of the financial turmoil, Italian Finance Minister Giulio Tremonti told reporters in Washington before the talks began. ``We won't sign it.''
While Britain has pushed for a coordinated agreement to guarantee loans between banks, one official from a G-7 member said it was unlikely the G-7 would endorse their proposal. Two European officials said earlier that the group was considering saying that no systemically important bank would be allowed to fail, and laying out principles for all nations to follow.
G-7 economic leaders ``have never released a statement that they have not reached consensus on,'' said Jenilee Guebert, senior researcher at the G-8 Research Group at the University of Toronto. ``It would be unique. At this stage, however, for him to be saying this doesn't necessarily mean it will transpire.''
In one reversal earlier today, Italian Prime Minister Silvio Berlusconi said governments may shut financial markets, only to take back the remark later. White House spokesman Tony Fratto said there would be no interference in market openings or closings.
Threat to Stocks
Italy's rejection of the draft exposes fault-lines through the group over how to respond to the worst financial crisis since the Great Depression and may add to investor fears that policy makers are still not doing enough to beat it. U.S. stocks slumped for an eighth straight day.
Officials gathered in Washington as global stock markets suffered their worst week since the 1970s. Policy makers had warned earlier against anticipating a commitment to any single course of action to quell the panic.
``Don't imagine we'll have a harmonized response that will be the same for everyone because you can't apply the same method to different market situations,'' French Finance Minister Christine Lagarde said. German Finance Minister Peer Steinbrueck said ``solutions may be different from country to country.''
Investors and economists have urged officials to step up their efforts to protect banks as a credit freeze threatens to choke off lending to companies and households and send the world economy into a deep recession.
IMF's Lipsky
International Monetary Fund First Deputy Managing Director John Lipsky, in a Bloomberg Radio interview today, urged ``decisive and coherent'' action. Still, he also said ``it would be unrealistic to expect that there would be some grand plan unveiled that would solve all the problems.''
``If there's not a coordinated commitment on interbank lending, I don't think the market has any other way to go than down,'' said Jens Nordvig, a currency strategist at Goldman Sachs Group Inc. in New York.
Unprecedented interest-rate cuts and bank bailouts haven't quelled the panic in markets, putting officials under pressure to pull even more policy levers today or risk exacerbating the financial and economic turmoil. Among options being discussed today: Pumping taxpayer funds into loss-ridden banks and guaranteeing their deposits and lending between them.
The Standard & Poor's 500 Stock Index slid 5.9 percent to 856.66 at 1:37 p.m. in New York, capping off a 27 percent plunge so far this month. The European Dow Jones Stoxx 600 Index has lost 20 percent in that period, and Japan's Nikkei 225 Stock Average has slumped 27 percent since Oct. 1.
`Act Now'
``Governments must act now and decisively to restore confidence, otherwise we are in for serious trouble and a long- run recession,'' said Moorad Choudhry, head of treasury at Europe Arab Bank Plc in London.
The policy makers from the U.S., Japan, Germany, U.K., France, Canada and Italy are meeting for the first time since the financial crisis intensified last month. They will release a statement at about 6 p.m.
Officials said they recognized the need to step up, with Bundesbank President Axel Weber saying that ``doing nothing is not an option at this stage.'' U.K. Chancellor of the Exchequer Alistair Darling told Bloomberg Television that ``it is absolutely essential that the world's largest economies act together, and they act together now.''
President George W. Bush addressed his nation, pledging the administration ``will continue to act.''
European Summit
Bush will meet with the G-7 tomorrow, an echo of former President Bill Clinton's visit with the group in 1998 amid the Russian debt default and collapse of hedge fund Long Term Capital Management LP. The broader Group of 20 will also convene tomorrow. European leaders will hold a summit the following day in Paris.
Former Federal Reserve Chairman Paul Volcker urged that ``all of them now admit or all of them own up to the fact their own banks are going to need support,'' in an interview with PBS Television's Charlie Rose show yesterday.
The G-7's dilemma is that even after a battery of policy actions, money markets remain gridlocked as banks shun lending to each other for fear they will lose the money or because they need it themselves. The cost of borrowing dollars for three months in London today rose to its highest this year and the rate in Tokyo jumped to the highest since 1998.
Darling wants countries to guarantee lending between banks, either by turning central banks into clearing houses for the loans or having governments back them. That would ``be an effective way of easing the crisis,'' said Marc Chandler, head of currency strategy at Brown Brothers Harriman & Co. in New York.
U.K. Plan
Fratto said today ``we're reviewing'' the U.K. proposal. Treasury Secretary Henry Paulson two days ago stopped short of endorsing the plan when asked about it in a press conference.
The U.S. already plans to follow Darling in another way by purchasing stakes in a wide range of banks within weeks, tapping authority included in the $700 billion rescue package passed by Congress last week.
The U.K. is engineering a 50 billion pound ($87 billion) strategy to partly nationalize at least eight British banks. Japanese lawmakers are also considering reviving a law that expired in March that would allow them to inject public money into regional financial companies.
Having previously maintained that German banks were sound, Steinbrueck said Germany's approach to saving them on a case-by- case basis was no longer working and that a broader strategy was required. ``We have to move away from discretionary behavior,'' he said.
U.S. FDIC
The U.S.'s Federal Deposit Insurance Corp. said today it has ``significant latitude'' to take further steps to support banks and their depositors using emergency powers. European leaders have already promised to protect savers.
Steinbrueck and Lagarde cautioned against expectations of a common strategy from the G-7. Lagarde said it is possible to ``show unity and coordinated proposals'' without a ``harmonized response.''
If governments fail, central banks may have more work to do after already executing emergency rate cuts this week. New York University professor Nouriel Roubini recommended they slash interest rates by at least 1.5 percentage points to avert a depression.
作者：theoretical 在 谈股论金 发贴, 来自【海归网】 http://www.haiguinet.com
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