It's a damp Diwali in Britain!
24 Oct, 2008, 2115 hrs IST, PTI
LONDON: Sales of firecrackers, gold and jewellery have plummeted due to the economic downturn in Britain, spreading gloom among companies that otherwise make brisk business during the festive Diwali season.
LONDON: Sales of firecrackers, gold and jewellery have plummeted due to the economic downturn in Britain, spreading gloom among companies that otherwise make brisk business during the festive Diwali season.
Across Britain, people of Indian origin have reduced spending on gifts such as rings, necklaces and bracelets.
This year, local councils have emerged as the main organisers of fireworks and other Diwali-related occasions.
Manjula Sood, the Lord Mayor of Leicester, last week inaugurated the lighting ceremony on Belgrave Road, which is also known as the Golden Mile due to the large number of jewellery shops lining it.
However, this year the Golden Mile has lost some of its sparkle as jewellery sales have plunged drastically due to the economic slowdown.
Some shops there have reported a 50 per cent fall in jewellery sales. Leicester has a large population of Indian origin and has earned the reputation of holding the largest Diwali celebrations outside India. The local council extends considerable support to Diwali festivities every year.
Jaffer Kapasi, director of Leicester Asian Business Association, said Diwali was always a busy time for Asian jewellers in Leicester but this year trade was "drastically down".
"A lot of people are used to exchanging gifts at this time but there's been a real cutback on spending. With all the doom and gloom, people are being very careful," he told the local media.
US trying to teach Iraqis how to spend its oil riches
25 Oct, 2008, 0512 hrs IST, AGENCIES
BAGHDAD: Iraq's government has an unusual money problem as much of the world grapples with a credit crunch, it can't spend its oil riches fast enough
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The US is trying to change that by training Iraqi bureaucrats struggling to emerge from a centralized system in which nearly all decisions, from where to build a water treatment plant to which workers would do the job, came from the top.
Money also was scarce for more than a decade after the UN Security Council imposed sanctions to punish Saddam Hussein's regime for the 1990 invasion of Kuwait. "Our efforts are devoted to helping the Iraqis spend their own money," said Marc Wall, the US Embassy's coordinator for economic transition in Iraq. "We've zeroed in on it in the last year or two."
The issue came to the fore this summer when the US General Accounting Office predicted Iraq could finish the year with as much as a $79 billion cumulative surplus because of oil revenues and unspent funds from previous budgets. The August report drew outrage in Congress, where lawmakers asked why the Iraqis haven't spent more of their own money on reconstruction efforts while US taxpayers shell out some $12 billion a month for Iraq, most for military operations.
US and Iraqi officials dispute the GAO figures, arguing they are inflated and do not reflect Iraqi accounting procedures. They also say Iraqi spending on reconstruction is expected to increase by 50 percent from 2007 to 2008. But most agree that major obstacles still include inexperienced bureaucrats, too few Iraqi contractors and a cumbersome approval procedure aimed at curbing corruption.
The US Agency for International Development's Tatweer project is designed to train Iraqi civil servants in basic decision-making skills to help them allocate funds and effectively deliver government services such as electricity, water and security.
The $339 million program, paid for by American taxpayers, began in July 2006 and is scheduled to finish in January 2011. Instructors include Iraqis, Jordanians, Lebanese and Egyptians, native Arabic speakers who were mostly educated in the United States or other countries. Each earns about $1,500-$1,700 a month.
One recent class of bureaucrats from various Iraqi ministries, six men and six women sitting around an oval table, listened attentively as the instructor told them how to diagram a decision tree.
The analysis and problem-solving tool is aimed at determining possible sequences of events and their consequences to choose the best investment. But one student raised her hand to ask how, exactly, that would work in Iraq.
"We have instability and insecurity. You have to consider the black market," said Shetha Nasser, a 46-year-old engineer at the Water Resources Ministry. Nasser's concerns reflect the myriad problems facing Iraqis as they try to overcome decades of isolation from war, sanctions and centralization.
The postwar Iraqi government inherited an old-fashioned, paper-based system. Violence also has taken its toll, with insurgents frequently targeting government employees. Wearing a black skirt and sequined headscarf, Nasser said she has worked with feasibility studies for nine years but never really knew how to do them.
"We didn't have clear guidelines or methods ... because of the gap between Iraq and the international community," she said. Instead, the orders generally came from above and needed only to be implemented. Prices also were fixed under Saddam, aiding cost estimates.
"It was easier before the war. It was more stable," she said. "The decision tree actually probably applies more in Iraq now because there are so many different variables here." Sattar Hussein, a 42-year-old instructor for Tatweer, which means development in Arabic, said the key is training Iraqis in how to choose the best projects.
"They have the money, but they don't understand how to invest the money to help the people," the Fallujah native said during a class break for coffee and cookies. "The idea is to prepare these people for the future because they will be the decision-makers."
The Finance Ministry has been preparing to present a $79 billion budget for 2009, with $19.2 billion of that for reconstruction. That would be a record sum after this year's $70 billion budget, including $10.1 billion for reconstruction.
Those figures could be whittled down because of falling oil prices, which have plunged from a summertime high of $150 a barrel to less than $70 this week. Next year's spending plan was based on oil prices remaining above $80.
Wall, the US Embassy's economics transition chief, said the Iraqis could feel the hit but predicted their surplus will protect them. "There is a cushion, but it's not going to be as large as many expected," he said Wednesday during an interview in his office, a former kitchen in Saddam's Republican Palace.
Critics say it's time for the US to force the Iraqi government to step up its own spending.
"If you look at the capacity of the Iraqi government, I think basically it's really the question of will, not capacity," said Lawrence J Korb, a military analyst at the liberal Center for American Progress. "Right now they can sit back ... and not make the hard choices. We do it for them."
Korb said the government has ignored a pool of experienced bureaucrats because they had belonged to Saddam's ousted Baath Party. He also noted Iraqis spend heavily on operating expenses such as government salaries instead of reconstruction.
"The percentage going to current operating expenses is going up every year as opposed to making the people's lives better in the future," he said.
Banks will not be hit by global crisis: FM
Banks will not be hit by global crisis: FM
25 Oct, 2008, 1959 hrs IST, PTI
SIVAGANGA: The government on Saturday said that the bank deposits are safe and there will be no impact of the 'global economic tsunami' on them.
"We have been insulated from the impact of global economy in the banking sector. There is no need for any apprehension on the part of depositors about any impact of the global recession as their deposits are covered under an insurance scheme," Finance Minister P Chidambaram said while inaugurating a branch of the public sector UCO Bank here.
He said despite the global economic crisis, the country would be able to achieve a growth of 8 per cent during the current fiscal.
Most of the banks in US were facing closure due to the crisis, he said, adding Indian banks, however, were well protected.
"The farsightedness of late Indira Gandhi, who nationlised banks, is paying now. while the US administration is ploughing money to save banks in that country, our banks are well protected due to the nationlisation', he said.
The private sector banks were also on a sound footing, he added.
RBI promises swift action on liquidity if needed
25 Oct, 2008, 1941 hrs IST, PTI
MUMBAI: With the stock market still not not reacting positively to a flurry of measures, the RBI on Saturday promised to act "swiftly and pro-activel
y" to evolving situations and in case of liquidity constraints.
y" to evolving situations and in case of liquidity constraints.
A day after he announced the mid-term review of the annual monetary policy that left the key rates unchanged, RBI Governor D Subba Rao allayed fears of recession in India and maintained the growth story will continue despite a slight deceleration.
Justifying RBI's cautious credit policy announced yesterday, he said the RBI did not tinker with key rates in its credit policy to push growth as it had to balance price stability and growth.
"If there are liquidity constraints or anything needed to be done within RBI's mandate, we will do it," he told reporters adding the RBI would act swiftly and pro-actively to evolving situations.
Between Oct 6-20, the RBI has injected Rs.1,85,000 crore liquidity into the system and the "one per cent repo rate cut was aimed at getting the financial markets going and giving them confidence," he said.
If the situation warranted, Rao said RBI would not not hesitate to either infuse or withdraw liquidity from the system.
Billionaires list: Many Indian tycoons may slip
25 Oct, 2008, 0645 hrs IST,Vijay Gurav, ET Bureau
MUMBAI: The next time Forbes announces its list of billionaires (assuming it dares to do so even amid a massive wealth destruction globally), chances are that many Indian tycoons will find to their dismay that their rankings have slipped a few notches.
Even if they managed to retain their slots, or even climb up a few rungs, it would still be cold comfort, as few billion of their wealth would evaporated amid the ongoing turmoil in the stock market.
As the late British financier Sir James Goldsmith remarked when congratulated for cashing out before the stock market crash of 1987, ”It is like winning a game of bridge on the decks of the Titanic.”
The Sensex recorded the second-biggest single-day fall in absolute terms on Friday when it crashed by 1,071 points, or 11%, to close at 8,701. With this, the index has crashed more than 12,000 points, or nearly 60%, since its peak of 20,873 achieved on January 8, 2008.
Market cap of all the companies traded on the Bombay Stock Exchange (BSE) has evaporated by a staggering Rs 46 lakh crore, or $940 billion during the period. So, how poorer have top industrialists like the Ambanis, Tatas and Birlas become after the meltdown in the share prices of their companies?
An ET analysis of promoter wealth loss between January 8 and October 24, 2008, shows that the two Ambani brothers bore the brunt of the stock market mayhem, witnessing the highest wealth erosion among promoters of the top business houses in the country.
Though still dominating the market cap ranking, RIL chairman Mukesh Ambani saw his personal wealth crash from $ 57.6 billion as on January 8 to $14.4 billion as on Friday, a fall of 75% since January 8.
A major part of the wealth erosion happened in the flagship company, RIL, whose market cap has declined by Rs 2.8 lakh crore, or $ 57 billion. The market cap of two other group companies Reliance Petroleum and Reliance Industrial Infrastructure fell by $ 15.3 billion and $0.7 billion during the period.
Mukesh’s younger Brother Anil Ambani of the ADAG group saw his wealth tumble from $48.4 billion to $8.4 billion, a loss of 83%. His five companies, Reliance Communication, Reliance Capital, RNRL, Reliance Infrastructure and Adlabs Films, recorded an aggregate market cap loss of $53.7 billion.
Realty major DLF is the third-biggest loser where the promoter wealth has eroded from $44 billion to as low as $6 billion. DLF is followed by Tatas who saw their wealth in 27 listed companies plunge from $38.2 billion to $12.8 billion, a loss of 67%.
TCS, Tata Motors, Tata Power, Tata Communications and Tata Teleservices are among the key companies in the Tata group to have taken a big hit on market cap during January 8 to October 24 2008.
Market unlikely to witness recovery soon
25 Oct, 2008, 0706 hrs IST,Surya R Kannoth, ECONOMICTIMES.COM
MUMBAI: The worst is not over yet. As equities suffered their worst week in stock market history, it is imminent that the world economy is in deep tr
ouble and it looks like no matter what anyone does, it's not going to do any better.
The MSCI All-Country World Index, a gauge of equity markets in developed and emerging nations, has tumbled 47 per cent this year as a freeze in credit markets sparked by $659 billion of asset write-downs and credit losses at banks raised concern that the global economy is headed for a recession. About $30 trillion of market value has been erased from global equities in 2008, according to data compiled by Bloomberg.
Mirroring a sharp decline in global equity markets, December Dow Jones, Standard & Poor's 500 and Nasdaq 100 Futures tumbled between 6.3 per cent and 6.7, pointing to carnage on Wall Street Friday after global stocks were pounded on fears that the world is headed for the worst economic slowdown since the Great Depression.
Signs are afoot that some of the world's major economies may be in or close to recession-- technically defined as two consecutive quarters of negative growth. Japan and the euro zone's growth contracted in the second quarter, while the UK economy came to a standstill in the same period.
Back home, the emotional nexus between an economic downturn and a bear market was demonstrated brutally in Friday's trade. Despite continuing pep talk from Finance Minister P Chidambaram and host of measures by RBI to prop up the markets, investors refused to relent.
Ambareesh Baliga, VP, Karvy Stock Broking said, "Indian investors are getting numb to such falls in the markets. Markets are behaving in a very irrational manner and any one having their holdings in equities should use this fall to churn their portfolio and get into better stocks. However, first time investors should stay away from the markets. The redemption pressure from the FIIs is still witnessed, though not necessarily on P-note front, as they have enough in the cash markets. There are no clear indications to the end of their negative view on the Indian equities."
After the massive selling by foreign institutional investors, it was the turn of the long-only funds for redemption, and that being delivery-based, will remain a major concern for the markets.
Anita Gandhi, Head of Institutional Business, Arihant Capital Markets, said, “FIIs continued to sell their holdings. At our desk, even the institutions are opting to stay on the fence. We are advising our clients to stay away from the markets at this juncture. It looks very unlikely for the markets to witness a recovery soon and the pain would be still there, if not on the price front, on the time front."
But the worst hit in the market turmoil were the small-time retail players. Scores of retail investors who rushed into the stock market last year hoping to join the gold rush after the indices hit a series of record highs, have been hit very badly. Investor confidence has been shattered to such a level that they vow not to venture into the markets ever again.
Speaking on a more positive note, J Venkatesan, fund manager, Sundaram BNP Paribas, advises, “I think risk levels have gone up. Till the global situation eases, investors need to bear in mind that these huge volatilities would continue. I sense that market is closer to bottom now. Investors need to stay invested considering the fact that India's growth story is still relevant.”
Chit funds caught in a cleft stick
25 Oct, 2008, 0542 hrs IST,Shailesh Menon, ET Bureau
MUMBAI: The global financial crisis and its escalating fallout in India have taken a heavy toll on an obscure corner of the Indian financial system.
Vishi schemes, community saving schemes popularly known as kuries outside Gujarat, and small unregistered chit funds that invest in stock markets, are struggling to return money invested by investors.
Vishi schemes, community saving schemes popularly known as kuries outside Gujarat, and small unregistered chit funds that invest in stock markets, are struggling to return money invested by investors.
If market sources are to be believed, there are any number of unregistered chit fund managers and vishi sanchalaks (vishi bookmaker) out there struggling to recover public money invested in the market.
While vishi schemes thrive in rural districts of Gujarat, predominantly in Kutch, and some Gujarati-dominated hubs in Mumbai like Ghatkopar, Mulund and Bhiwandi, chit funds rule the roost in southern states like Andhra Pradesh, Tamil Nadu and Kerala. Registered chit funds are not allowed to invest in stock markets.
In some cases, chit funds can put their money as simple bank deposits, the yields on which should ideally be distributed among scheme subscribers. Registered chit funds can only invest from their own capital, not money deposited by their members. However, a large number of unregistered chit funds flout such rules.
If one goes by unofficial estimates from the All India Association of Chit Funds (AIACF), there are only some 15,000 registered chits funds in India. The number of unregistered ones will be in lakhs.
“Unregistered funds can do anything with people’s money. The chit foreman handling the fund could misappropriate funds by delaying subscriber payments. Though it is only for the short term, a 15-day delay could turn bad for investors,” said M Krishna Bhaarathy, managing director, Mylswamy Chits (P) Limited, and the regional secretary (Tamil Nadu) of AIACF.
“There are very few registered chit funds in Kutch. The situation is worse in Bhuj, where there are 5 to 6 very big vishi schemes, with investment options, that have invested a portion of their money in stock markets,” said Praful Gajra, a Bhuj-based investor and a small-time vishi operator.
According to Mr Gajra, several vishi schemes, which have pooled money and taken delivery of shares, will go bust as the shares in their portfolios have dropped drastically over the past few weeks.
“There are others who only do arbitrage between cash and derivatives. These vishi operators lend a portion of their pool, at interest rates as high as 12% PA, to brokers for trading. The term of the loan usually is one month. At the end of one month, the broker has to return the principal amount, along with the interest,” said Nirav Oza, a Mumbai-based HNI, adding, “For instance, if the operator has given Rs 1 crore from the pool to trade, the broker has to pay back Rs 1.12 crore at the end of one month.”
Unregistered chit funds are run in a manner very similar to vishi schemes. In case of chit funds, the foreman (bookie) enters into an agreement with a number of subscribers that every person shall subscribe a certain sum for a certain period and each subscriber in his turn, as determined by a draw of lots, shall be entitled to a prized amount.
For example, 20 subscribers agree to subscribe to an amount of Rs 5,000 for 25 months, for a total chit value of Rs 1,00,000. Each subscriber will get his chit amount in his turn as determined by draw of lots or by auction.
For example, 20 subscribers agree to subscribe to an amount of Rs 5,000 for 25 months, for a total chit value of Rs 1,00,000. Each subscriber will get his chit amount in his turn as determined by draw of lots or by auction.
During auction, all non-prized subscribers bid by allowing a percentage of subscription to be forgone. The highest bidder, who allows maximum percentage to subscribers, is given the chit amount. A dividend is distributed at every draw after commission to the bookie.
http://economictimes.indiatimes.com/News/Economy/Finance/Chit_funds_caught_in_a_cleft_stick/articleshow/3639036.cms
http://economictimes.indiatimes.com/News/Economy/Finance/Chit_funds_caught_in_a_cleft_stick/articleshow/3639036.cms
RBI to closely monitor overseas operations of Indian banks
24 Oct, 2008, 1619 hrs IST, PTI
MUMBAI: Taking cue from the ongoing financial turmoil, the RBI has decided to strengthen the regulatory framework and monitor the overseas operation
s of Indian banks to ensure their safety and solvency.
s of Indian banks to ensure their safety and solvency.
The mid-term policy review announced today said an appropriate supervisory framework, including a revised off- site surveillance system, for overseas operations of Indian banks would be finalised by end-November 2008.
In addition, the apex bank would also constitute an internal Working Group to lay down the roadmap for adoption of a suitable framework for cross-border supervision and supervisory cooperation with overseas regulators.
The committee would submit report by the end of November. According to Punjab National Bank Executive Director J M Garg, these are welcome initiatives as it would help in ensuring safety of the banks.
Although Indian banks are largely insulated from the global financial turmoil, further strengthening of safety valve would mitigate the risk down to zero, he said.
The regulator has also asked banks to give detailed information on the sources and deployment of their funds based on the overseas returns.
Concerns were conveyed to banks for taking appropriate action, the statement added. RBI noted banks with overseas presence and branches of foreign banks functioning in India have migrated to Basel II Framework with effect from March 31, 2008.
Remaining banks are required to migrate to the Basel II framework with effect from March 31, 2009, it said.
Banks face rising bad debts, funding squeeze
24 Oct, 2008, 1320 hrs IST, REUTERS
MUMBAI: Indian banks may be relatively sheltered from the direct impact of global credit turmoil, but they are fighting rising loan defaults amid a liquidity crunch that could hit profits. Leading private sector bank ICICI Bank has so far borne the brunt of investor concerns about its exposure to the financial crisis, repeatedly stressing it was solvent and deposits were safe since Lehman Brothers filed for bankruptcy protection in mid-September.
While bad debts are expected to rise in coming months, authorities from the prime minister down have declared Indian banks to be safe. In September, the central bank put out a statement saying ICICI was well capitalised as customers in some parts of the country queued to withdraw deposits. But ICICI's shares have still lost 70 percent of their value so far this year as investors fear the worst.
"If a bank faces a liquidity crunch, it is serious trouble. Some of the overseas institutions fell not because they did not have assets but because they did not have liquidity to fund the assets," said A.K. Purwar, a former chairman of State Bank of India, India's largest bank. "In India, despite the mandatory requirements, it has happened so many times before."
On Monday, top Indian lender State Bank of India is expected to post a 16 percent profit rise on solid loan growth, while ICICI is likely to report earnings slipped for the second consecutive quarter. But all eyes will be on ICICI's exposure to bonds linked to Lehman and other soured credit.
India's banking system is dominated by government-run banks -- they account for about 70 percent of assets and liabilities -- and all banks have to hold nearly one-third of their deposits in government bonds and as cash reserves with the central bank.
Since 1969, India has not allowed a bank to collapse, merging at least two dozen troubled lenders with stronger, mostly state-run banks, according to the central bank. And Indian banks' total exposure to failed Western banks amounted to $1 bn, a fraction of their total loan book of $510 bn at end September, according to central bank data.
"Indian banks do face headwinds, though it is not a worrying or dire situation now," said Ritesh Maheswari, senior director of Asia Financial Institutions Ratings at Standard & Poor's in Singapore. "But if the credit crisis is prolonged it could have limited liquidity constraints on Indian banks and many others in the region will also face similar issues."
CREDIT EXPLOSION
Banks had outstanding loans of 25.4 trillion rupees ($510 bn) and total deposits of 34.4 trillion rupees ($690 bn) at end-September, according to central bank data. In the three fiscal years ending March 2008, banks' lending grew at annual rates of around 30 percent. That has slowed to around 25 percent, but still remains above the central bank's prefered rate of 20 percent in 2008/09 (April/March).
Retail loans, mortgages, credit cards, auto and consumer durable loans, which were among the fastest-growing segments, are now likely to be major risk areas as bad debts are expected to rise to 4 percent of advances by March 2009, said rating agency CRISIL, a unit of Standard & Poor's. Loans for housing and stock investments also mushroomed in recent years, helped by booming economic growth. But interest rates have risen, the stock market has plunged by more than half this year and the property market has turned down.
Uses for $700 billion bailout money ever shifting
25 Oct, 2008, 2025 hrs IST, AGENCIES
WASHINGTON: First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets.
Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again.
But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.
Three weeks after becoming law, and with the first dollar of the $700 billion yet to go out, officials are just beginning to talk about helping a few strapped homeowners keep the foreclosure wolf from the door.
As the crisis worsens, the government's reaction keeps changing. Lawmakers in both parties are starting to gripe that the bailout is turning out to be far different from what the Bush administration sold to Congress.
In buying equity stakes in banks, the Treasury has "deviated significantly from its original course," says Alabama Sen. Richard Shelby, the top Republican on the Senate Banking, Housing and Urban Affairs Committee. "We need to examine closely the reason for this change," said Shelby, who opposed the bailout.
The centerpiece of the Emergency Economic Stabilization Act is the "troubled asset relief program," or TARP for short. Critics note that tarps are used to cover things up. The money was to be devoted to buying "toxic" mortgage-backed securities whose value has fallen in lockstep with home prices.
But once European governments said they were going into the banking business, Treasury Secretary Henry Paulson followed suit and diverted $250 billion to buy stock in healthy banks to spur lending.
Bank executives hinted they might instead use it for acquisitions. Sen. Christopher Dodd, chairman of the Senate banking committee, said this development was "beyond troubling."
Sure enough, a day after Dodd, D-Conn., made the comment, the government confirmed that PNC Financial Services Group Inc. was approved to receive $7.7 billion in return for company stock. At the same time, PNC said it was acquiring National City Corp. for $5.58 billion.
"Although there will be some consolidation, that's not the driver behind this program," Paulson recently told PBS talk show host Charlie Rose. "The driver is to have our healthy banks be well-capitalized so that they can play the role they need to play for our country right now."
Other planned uses of the bailout money have lawmakers protesting, although it is only fair to note there is nothing in the law that they just wrote to prevent those uses.
Sen. Charles Schumer, D-N.Y. questioned allowing banks that accept bailout bucks to continue paying dividends on their common stock.
"There are far better uses of taxpayer dollars than continuing dividend payments to shareholders," he said.
Schumer, whose constituents include Wall Street bankers, said he also fears that they might stuff the money "under the proverbial mattress" rather than make loans.
Neel Kashkari, head of the Treasury's financial stability program, told Dodd's committee this past week that there are few strings attached to the capital-infusion program because too many rules would discourage financial institutions from participating.
Asia-Europe summit shows power shifting east: David Miliband
25 Oct, 2008, 1612 hrs IST, AGENCIES
LONDON: The 43-nation Asia Europe Meeting (ASEM), which wound up in Beijing on Saturday, showed that economic power has shifted from the West to the
East, said British Foreign Secretary David Miliband.
In the Chinese capital, leaders called for an overhaul of the world's financial mechanisms and discussed climate change and energy security.
"I don't think it's just the fact that we are meeting in The Great Hall of the People and we listened to the general secretary of the Chinese Communist Party talking about the need to prop up global capital markets that brings home to one that there is this big shift in economic power," Miliband told BBC radio from Beijing.
"But what is also clear is that there's been an increase in economic vulnerability: the Pakistani prime minister (Yousuf Raza Gilani) was here talking about how his country is now threatened with an economic tsunami."
The ASEM which was set up in 1996 as a potential counter for Europe to strong US influence in Asia.
Miliband said the meeting produced "renewed commitment to multilateral co-operation, deeper multilateral co-operation, above all in the area of financial regulation."
He said Asian countries were not blaming the West for the financial crisis, insisting there was a shared commitment to resolving it.
"There are deeper imbalances in the world economy that need to be addressed and that actually are part of the global economic downturn," he said.
"It's not just a financial problem we've got; it's a more fundamental issue of economic imbalance."
Top UN officials urge reform of world finance system
25 Oct, 2008, 0803 hrs IST, AGENCIES
UNITED NATIONS: UN chief Ban Ki-moon joined chief executives of key UN institutions in calling for a meaningful and well-coordinated reform of the i
nternational financial system.
nternational financial system.
Participants at yesterday's UN summit said that "the market and regulatory failures that have led to this (financial) crisis must be addressed as a matter of urgency" when leaders of 20 industrialized and emerging powers meet in Washington November 15.
"We reaffirm the need for meaningful, comprehensive and well-coordinated reform of the international financial system and pledge our support to this end," they said in a joint statement.
They also urged rich countries to strengthen their commitments on official development assistance to poor nations and called for a successful conclusion to the Doha Round of trade liberalization talks.
"A healthy, open and rule-based trading system is essential to maintaining long-term economic growth to the benefit of all," they added.
The Doha Round was launched in the Qatari capital in 2001 with the aim of liberalizing trade rules for the benefit of developing countries. But a summit in July collapsed over a disagreement on tariffs between the United States and India.
Attending yesterday's summit were World Bank president Robert Zoellick, International Monetary Fund chief Dominique Strauss-Kahn, UN Development Program administrator Kemal Dervis and the heads of several other UN agencies, including the Food and Agriculture Organization, the World Health Organization and the International Atomic Energy Agency.
Chandrayaan-1 spacecraft moves to higher orbit 24 Oct, 2008, 2100 hrs IST, ECONOMICTIMES.COM
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