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"IMF in global 'meltdown' warning" !
IMF in global 'meltdown' warning
The world financial system is teetering on the "brink of systemic meltdown", the head of the International Monetary Fund (IMF) has warned in Washington.
Dominique Strauss-Kahn said the crisis was being fanned by fears over debt-ridden banks but added rich nations had so far failed to restore confidence.
He spoke after talks with US President George W Bush, Group of Seven (G7) finance ministers and the World Bank.
Mr Bush said the global economic crisis needed a united international response.
Speaking in the US capital on Saturday, Mr Strauss-Kahn said: "Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."
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George Bush says the US will lead the response to the crisis
The IMF chief was joined at the White House by finance ministers from the G7 most-industrialised nations (the US, Canada, France, Germany, Britain, Italy and Japan), as well as World Bank President Robert Zoellick.
Following talks with the economic leaders, Mr Bush said: "We must ensure the actions of one country do not contradict or undermine the actions of another.
"In an interconnected world, no nation will gain by driving down the fortunes of another. We are in this together. We will come through it together."
The meeting came a day after Asian, European and US markets continued to panic sell despite rate cuts and cash injections by central banks, amid widespread fears of a global recession.
Panic selling
Late on Friday, US Treasury Secretary Henry Paulson said the US planned to invest directly in banks for the first since the 1930s, following a similar UK programme of partial bank nationalisation.
The G7 had earlier not ruled out adopting another part of the British plan - to guarantee borrowing between banks - as they issued a five-point communique in Washington.
[We must] redirect the markets so that they serve the people, and not ruin them
Angela Merkel
German Chancellor
The finance ministers also pledged to free up the flow of credit, back efforts by banks to raise money and revive the mortgage market.
And the G7 left the door open to further reductions in interest rates, which six central banks this week jointly cut by half a percentage point.
But BBC economics correspondent Andrew Walker, in Washington, says there is some disappointment that the G7 plan lacks detail.
Meanwhile, French President Nicolas Sarkozy and German Chancellor Angela Merkel said there would be no common financial rescue fund for Europe, like the US bail-out of Wall Street.
The two leaders said a common approach to the financial crisis would emerge from a Paris summit on Sunday of 15 eurozone leaders.
UK Prime Minister Gordon Brown will hold talks with Mr Sarkozy in the French capital before the meeting.
Chancellor Merkel said governments must "redirect the markets so they serve the people, and not ruin them."
The heads of the EU's four biggest economies - Britain, France, Germany and Italy - held a first crisis summit last week, but were split over the need for a common plan.
Analysts say another week of plunging stock markets has focused minds and the real test of this weekend's scramble by world leaders to shore up the international financial system will come once markets reopen again on Monday.
Story from BBC NEWS:
BBC NEWS | Business | IMF in global 'meltdown' warning
Published: 2008/10/11 18:11:36 GMT
© BBC MMVIII
IMF in global 'meltdown' warning
The world financial system is teetering on the "brink of systemic meltdown", the head of the International Monetary Fund (IMF) has warned in Washington.
Dominique Strauss-Kahn said the crisis was being fanned by fears over debt-ridden banks but added rich nations had so far failed to restore confidence.
He spoke after talks with US President George W Bush, Group of Seven (G7) finance ministers and the World Bank.
Mr Bush said the global economic crisis needed a united international response.
Speaking in the US capital on Saturday, Mr Strauss-Kahn said: "Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."
Please turn on JavaScript. Media requires JavaScript to play.
George Bush says the US will lead the response to the crisis
The IMF chief was joined at the White House by finance ministers from the G7 most-industrialised nations (the US, Canada, France, Germany, Britain, Italy and Japan), as well as World Bank President Robert Zoellick.
Following talks with the economic leaders, Mr Bush said: "We must ensure the actions of one country do not contradict or undermine the actions of another.
"In an interconnected world, no nation will gain by driving down the fortunes of another. We are in this together. We will come through it together."
The meeting came a day after Asian, European and US markets continued to panic sell despite rate cuts and cash injections by central banks, amid widespread fears of a global recession.
Panic selling
Late on Friday, US Treasury Secretary Henry Paulson said the US planned to invest directly in banks for the first since the 1930s, following a similar UK programme of partial bank nationalisation.
The G7 had earlier not ruled out adopting another part of the British plan - to guarantee borrowing between banks - as they issued a five-point communique in Washington.
[We must] redirect the markets so that they serve the people, and not ruin them
Angela Merkel
German Chancellor
The finance ministers also pledged to free up the flow of credit, back efforts by banks to raise money and revive the mortgage market.
And the G7 left the door open to further reductions in interest rates, which six central banks this week jointly cut by half a percentage point.
But BBC economics correspondent Andrew Walker, in Washington, says there is some disappointment that the G7 plan lacks detail.
Meanwhile, French President Nicolas Sarkozy and German Chancellor Angela Merkel said there would be no common financial rescue fund for Europe, like the US bail-out of Wall Street.
The two leaders said a common approach to the financial crisis would emerge from a Paris summit on Sunday of 15 eurozone leaders.
UK Prime Minister Gordon Brown will hold talks with Mr Sarkozy in the French capital before the meeting.
Chancellor Merkel said governments must "redirect the markets so they serve the people, and not ruin them."
The heads of the EU's four biggest economies - Britain, France, Germany and Italy - held a first crisis summit last week, but were split over the need for a common plan.
Analysts say another week of plunging stock markets has focused minds and the real test of this weekend's scramble by world leaders to shore up the international financial system will come once markets reopen again on Monday.
Story from BBC NEWS:
BBC NEWS | Business | IMF in global 'meltdown' warning
Published: 2008/10/11 18:11:36 GMT
© BBC MMVIII
