Google

Saturday, November 8, 2008

World has 100 days to fix crisis: EU leaders



European Union leaders backed a 100-day deadline by which the world's leading economies should decide urgent global finance reform
s, French President Nicolas Sarkozy said on Friday.

Sarkozy, who chaired a special meeting of EU nations, said the financial crisis and economic downturn required a quick deal on an overhaul at a Nov 15 summit in Washington bringing together leaders of the world's 20 largest industrialized nations and emerging economies.

"We are in an economic crisis. We have to take this into account," Sarkozy said. "We have to react and we have no time to lose." "I'm not going to take part in a summit where there is just talk for talk's sake," Sarkozy told reporters after talks between the heads of the EU's 27 nations.

The EU is calling for a second global summit next spring to flesh out changes to the way the world economy is governed. They want to see far more supervision of big financial companies and are urging governments to jointly monitor them.

They want to prevent a repeat of the Wall Street excesses that caused havoc in markets worldwide, and are bringing emerging economies China, India and Brazil on board for talks on shaping a new world economic order.

British Prime Minister Gordon Brown said the Washington talks should be a "decisive moment for the world economy." A text agreed by EU leaders says they want an early warning system that would watch for financial bubbles and prevent ``world imbalances'', such as the swelling US trade deficit.

They also suggest making the International Monetary Fund the world's financial watchdog, suggesting it be given more power to curb financial crises and give more money to aid countries in trouble.

The Europeans also want to close loopholes that allow some financial institutions to evade regulation, and ensure supervision for all major financial players, including ratings agencies or funds carrying high amounts of debt.

The leaders in a declaration called for greater transparency in markets that would no longer omit "vast swathes of financial activity from auditable, certifiable accounts." It also said "excessive risk-taking must be overhauled," a reference to the sale of high-risk debt securities and executive pay that may reward risk-taking.

EU leaders will call on the Nov 15 summit to agree immediately on five principles: submit ratings agencies to more surveillance; align accounting standards; close loopholes; set banking codes of conduct to reduce excessive risk-taking; and ask the International Monetary Fund to suggest ways of calming the turmoil.

To date, European governments alone have committed some 2 trillion euros ($2.6 trillion) in cash injections, bank deposit guarantees, interbank loan coverage and partial or full nationalization to prop up consumer and business confidence.

The damage done worldwide is fueling a search for a "new Bretton Woods", a reference to the post-World War II conference that shaped the international financial system.

In Washington, there is little desire in the waning days of the Bush administration for a major overhaul of financial regulations. But the United States and European nations are no longer the only players. China and Brazil and India are jumping at the chance to join a major international effort.

G-20 finance officials nations will meet this weekend in Sao Paulo, Brazil, to prepare next week's summit. This may pave the way for emerging economies to play a larger role in global finance talks. France is suggesting bring them on board as members of the exclusive world club of G-8 industrialized nations which regularly meets to discuss the global economy.
 
 
Source: ET

No comments:

Sify.com - News

NDTV - Business News

Moneycontrol - Buzzing Stocks

Moneycontrol Top Headlines

News Flash from IndiaEarnings

Saraswat Bk seeks RBI nod to acquire ailing South Ind Co Bk
Telekom Malaysia to pick up addl 15% stake in Idea: Srcs
Hind Rectifiers brd meet on June 24 to consider bonus issue
Inflation will touch double digit mark next week: I-Sec
NY Times in talks to buy 5% stake in Deccan Chron Arm
Inflation for wk ended Apr5 revised to 7.71% vs 7.14%earlier
Inflation for week ended May 31 at 8.75% vs 8.24%
Indian economy won't be as badly hit as the global eco:DCB
Over a period of time mkt may drift down to 4060 :Atul Suri
Shriram Cap likely seller in Shriram City Un Fin block deal
Shriram City Union Fin changes 12.2% Eq via block deal
No big rally in mkt till oil pices cool off: Lehman Bros
BoJ keeps key interest rate unchanged at 0.5%
J&K Bank raises Prime Lending Rates by 100 bps to 14%
L&T aays plan to list IT sdubsidiary in FY09
IFCI okays initiation of legal process to align LIC stk
Rupee opens at 42.82/USD vs 42.84/USD on Thursday
Karnataka Bank board approves 1:5 rights issue at Rs 100/sh
45.37 lakh Suzlon shr change hands on BSE at Rs 250.95/sh
Oil India plans to launch IPO by Sep: NW18
ABG Shipyard bags order worth Rs 127 Cr
Nutrient base pricing is good for industry:RCF
FM says avg prc of complex fert to decline by Rs 1416/t
Deccan Chronicle likely to place Sieger Eq at EV of USD750 m
BNP Paribas see 25 bps CRR hike before RBI July policy
Disclaimer