Finance leaders from the International Monetary Fund's (IMF) 185 member countries on Saturday endorsed a plan announced by major economies to chart a course out of the credit crisis.
The International Monetary and Financial Committee (IMFC), chaired by Egyptian Finance Minister Youssef Boutros-Ghali, called for "exceptional vigilance, coordination, and readiness to take bold action" to address the crisis.
Boutros-Ghali said the fact that all 185 IMF member countries, including emerging and developing economies, supported the Group of Seven plan (G7).
"We are committed to the plan of action," Boutros-Ghali said. "This is an essential element for restoring confidence."
The G7 on Friday vowed to take all necessary steps to unfreeze credit markets and ensure banks can raise money.
IMF Managing Director Dominique Strauss-Kahn said the committee agreed the IMF should take the lead in looking more in depth at what went wrong and coordinate with other institutions. He said the fund was the right forum for the job, given its universal membership, and that the IMF stood ready with resources to help any country facing financial difficulties due to the crisis.
The IMF cautioned that emerging economies may experience spillover effects from the financial crisis and it was important that they preserve economic stability.
"For these reasons, it is critically important that collaborative action be coordinated between advanced and emerging economies," the panel said.
Details of UK Banking Plan Expected on Monday
The British government is to give more details about its 400 billion pound banking rescue plan next week, Finance Minister Alistair Darling said on Saturday. "What we are doing over the weekend is looking at the specifics, how do we implement it, and we will be making an announcement at the beginning of the week," he told BBC television in Washington where he has been attending a G7 finance ministers' meeting.
Last Wednesday's financial bail out, which followed a dramatic fall in the value of banking shares on the London stock exchange on Tuesday, was targeted at stabilizing banks and getting them lending again.
The package of measures also included a 50 billion pound cash injection, guaranteeing interbank lending by 250 billion pounds to help unfreeze wholesale markets and extending a Bank of England scheme that swaps banks' risky assets for government debt to provide 200 billion pounds of cash to the system.
Darling, writing in the News of the World newspaper this weekend, said his "extraordinary steps" were necessary to help stave off lower growth, lower living standards and fewer jobs across the country.
"I did not step in because I wanted to prop up failing banks. If the banks stopped lending to people and to businesses, that would have serious repercussions for our economy and every one of us."
Darling said his views were shared by finance ministers meeting in Washington this weekend to discuss a similar package. "That is why they agreed to an 'urgent and exceptional' 5-point action plan, on a global scale," he wrote.
Prime Minister Gordon Brown will be traveling to Paris on Sunday for a euro zone leaders' meeting -- even though Britain is not signed up to the currency.
"He'll be meeting some of the biggest countries there and the European member states themselves will be having discussions further in the day to see what they can do to help their systems get going again," Darling told the BBC.
"We want to contribute to that process because it is absolutely essential that when you have a global problem like this, you reach solutions, and we are confident that can be done." When asked if Britain was in recession, he said the current credit crunch and high oil prices were having an impact.
"Our economy is slowing down," he said. "The key thing ... is to recognize that in the face of this slowdown we do everything we possibly can in our country and across the world to support our economies.
"This is a time when governments have to act and they need to act together ... to get through what is undoubtedly one of the most profound and significant shocks to the system we have seen in generations."
Analysts Responses
Most Wall Street and global economic analysts have been amazed by the speed and scale of the response by governments around the world in dealing with the economic issues at hand. With coordinated rate cuts, governments guaranteeing debts, and various stimulus packages, it has been an impressive few weeks of changes on the global scene. The one questionable point was of course done by our own Congress - specifically the House of Representatives. Beyond that one instance, everyone seems to be moving and impressed.
While it can be said that "many bazookas" are now working, it is not any single action that will make the credit or economic issues evaporate. Instead, it has been the moves by all of the "established" economies both independently and collectively that will start to turn the tide.
The past few weeks and the coming months will be discussed in economic and history books for decades for the sheer magnitude of both the crisis and global response.
Sources: Reuters, Marketwatch, AP, Yahoo, MSN
The International Monetary and Financial Committee (IMFC), chaired by Egyptian Finance Minister Youssef Boutros-Ghali, called for "exceptional vigilance, coordination, and readiness to take bold action" to address the crisis.
Boutros-Ghali said the fact that all 185 IMF member countries, including emerging and developing economies, supported the Group of Seven plan (G7).
"We are committed to the plan of action," Boutros-Ghali said. "This is an essential element for restoring confidence."
The G7 on Friday vowed to take all necessary steps to unfreeze credit markets and ensure banks can raise money.
IMF Managing Director Dominique Strauss-Kahn said the committee agreed the IMF should take the lead in looking more in depth at what went wrong and coordinate with other institutions. He said the fund was the right forum for the job, given its universal membership, and that the IMF stood ready with resources to help any country facing financial difficulties due to the crisis.
The IMF cautioned that emerging economies may experience spillover effects from the financial crisis and it was important that they preserve economic stability.
"For these reasons, it is critically important that collaborative action be coordinated between advanced and emerging economies," the panel said.
Details of UK Banking Plan Expected on Monday
The British government is to give more details about its 400 billion pound banking rescue plan next week, Finance Minister Alistair Darling said on Saturday. "What we are doing over the weekend is looking at the specifics, how do we implement it, and we will be making an announcement at the beginning of the week," he told BBC television in Washington where he has been attending a G7 finance ministers' meeting.
Last Wednesday's financial bail out, which followed a dramatic fall in the value of banking shares on the London stock exchange on Tuesday, was targeted at stabilizing banks and getting them lending again.
The package of measures also included a 50 billion pound cash injection, guaranteeing interbank lending by 250 billion pounds to help unfreeze wholesale markets and extending a Bank of England scheme that swaps banks' risky assets for government debt to provide 200 billion pounds of cash to the system.
Darling, writing in the News of the World newspaper this weekend, said his "extraordinary steps" were necessary to help stave off lower growth, lower living standards and fewer jobs across the country.
"I did not step in because I wanted to prop up failing banks. If the banks stopped lending to people and to businesses, that would have serious repercussions for our economy and every one of us."
Darling said his views were shared by finance ministers meeting in Washington this weekend to discuss a similar package. "That is why they agreed to an 'urgent and exceptional' 5-point action plan, on a global scale," he wrote.
Prime Minister Gordon Brown will be traveling to Paris on Sunday for a euro zone leaders' meeting -- even though Britain is not signed up to the currency.
"He'll be meeting some of the biggest countries there and the European member states themselves will be having discussions further in the day to see what they can do to help their systems get going again," Darling told the BBC.
"We want to contribute to that process because it is absolutely essential that when you have a global problem like this, you reach solutions, and we are confident that can be done." When asked if Britain was in recession, he said the current credit crunch and high oil prices were having an impact.
"Our economy is slowing down," he said. "The key thing ... is to recognize that in the face of this slowdown we do everything we possibly can in our country and across the world to support our economies.
"This is a time when governments have to act and they need to act together ... to get through what is undoubtedly one of the most profound and significant shocks to the system we have seen in generations."
Analysts Responses
Most Wall Street and global economic analysts have been amazed by the speed and scale of the response by governments around the world in dealing with the economic issues at hand. With coordinated rate cuts, governments guaranteeing debts, and various stimulus packages, it has been an impressive few weeks of changes on the global scene. The one questionable point was of course done by our own Congress - specifically the House of Representatives. Beyond that one instance, everyone seems to be moving and impressed.
While it can be said that "many bazookas" are now working, it is not any single action that will make the credit or economic issues evaporate. Instead, it has been the moves by all of the "established" economies both independently and collectively that will start to turn the tide.
The past few weeks and the coming months will be discussed in economic and history books for decades for the sheer magnitude of both the crisis and global response.
Sources: Reuters, Marketwatch, AP, Yahoo, MSN
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