1st global coordination hailed
WASHINGTON - IMF HEAD Dominique Strauss-Kahn hailed the first global coordination to tackle the financial crisis on Saturday, saying developing countries had backed a Group of Seven major economies' action plan.
'It is so important that the first coordination took place today in the IMFC when emerging market economies and low-income countries agreed with the principles and actions decided by the G7,' he said at a news conference on the first day of annual IMF and World Bank meetings in Washington.
'The first coordination between advanced countries and the rest of the world is now on track,' Mr Strauss-Kahn added.
The IMFC, the policy-guiding body, said it believed the IMF was ready to lend rapidly to countries in need of capital in the global financial crisis ravaging many economies.
'Using its emergency procedures, the Fund stands ready to quickly make available substantial resources to help member countries cover financing needs,' the IMFC said in a statement.
The governing body called for 'further intensive Fund engagement across the membership to discuss and develop robust policy responses to the crisis'. The IMFC underscored that 'collaborative action' between emerging and developed countries was critical to tackle the financial crisis.
Its statement came as the twin multilateral institutions meet in the throes of the worst financial crisis since the 1930s Great Depression.
The meetings follow Wall Street's worst week on record, worldwide stock market plunges, central bank coordinated interest rate cuts and nationalisation of collapsing financial firms in several countries.
'The depth and systemic nature of the crisis call for exceptional vigilance, coordination, and readiness to take bold action, the IMFC said.
'It underscores that the Fund has a critical mandate to foster the multilateral cooperation needed to restore and safeguard international monetary and financial stability.' The IMFC 'strongly endorsed' the five-point action plan agreed by the Group of Seven major economies on Friday.
The G7 pledged cooperation, decisive action and the 'use of all available tools to support systemically important financial institutions and prevent their failure'. 'The Fund (IMF) has asked for weeks, if not months, for more coordination in action, arguing that in such a crisis, cohesion and coordination was absolutely necessary,' Mr Strauss-Kahn said, stressing how serious the situation was for policymakers.
The IMF managing director also warned that the 'other crisis' developing countries face from soaring food prices should not be forgotten while the world grapples with the financial crisis.
Mr Strauss-Kahn said that although food costs had moderated in recent months, they are still much higher than they were 'and this bill is still unaffordable for poor countries'.
Donor country budgets are being strained as the financial crisis rips through markets and banks, slowing the economy, but Mr Strauss-Kahn called on them not to cut back on their aid commitments.
Poor countries 'absolutely need this money to avoid starvation'. The IMFC recognised that a number of emerging countries are vulnerable to the impact of the financial crisis, even if they have pursued sound economic policies in recent years.
'The difficult global financial environment, including elevated food and fuel prices, adds to the challenges for emerging market and developing countries to preserve macroeconomic stability, sustain growth, and make progress on poverty reduction,' it said in the statement.
The fast-moving global financial crisis has sparked a new sense of urgency for international cooperation.
Central bank chiefs and finance ministers of the Group of 20, a grouping that includes both rich and emerging nations such as Brazil, China, India and Russia are to hold a meeting at the IMF later on Saturday.
French President Nicolas Sarkozy, the current president of the European Union, has called a eurozone summit in Paris on Sunday as European leaders appeared to move towards a British-style plan of partial bank nationalisation.
Mr Sarkozy and German Chancellor Angela Merkel vowed on Saturday to work together on the crisis plan.
Britain is not a member of the eurozone but Mr Sarkozy said he would meet British Prime Minister Gordon Brown separately at the Elysee Palace just two hours before the main summit in order to 'maximise the chances' of full European cooperation. -- AFP
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WASHINGTON - IMF HEAD Dominique Strauss-Kahn hailed the first global coordination to tackle the financial crisis on Saturday, saying developing countries had backed a Group of Seven major economies' action plan.
'It is so important that the first coordination took place today in the IMFC when emerging market economies and low-income countries agreed with the principles and actions decided by the G7,' he said at a news conference on the first day of annual IMF and World Bank meetings in Washington.
'The first coordination between advanced countries and the rest of the world is now on track,' Mr Strauss-Kahn added.
The IMFC, the policy-guiding body, said it believed the IMF was ready to lend rapidly to countries in need of capital in the global financial crisis ravaging many economies.
'Using its emergency procedures, the Fund stands ready to quickly make available substantial resources to help member countries cover financing needs,' the IMFC said in a statement.
The governing body called for 'further intensive Fund engagement across the membership to discuss and develop robust policy responses to the crisis'. The IMFC underscored that 'collaborative action' between emerging and developed countries was critical to tackle the financial crisis.
Its statement came as the twin multilateral institutions meet in the throes of the worst financial crisis since the 1930s Great Depression.
The meetings follow Wall Street's worst week on record, worldwide stock market plunges, central bank coordinated interest rate cuts and nationalisation of collapsing financial firms in several countries.
'The depth and systemic nature of the crisis call for exceptional vigilance, coordination, and readiness to take bold action, the IMFC said.
'It underscores that the Fund has a critical mandate to foster the multilateral cooperation needed to restore and safeguard international monetary and financial stability.' The IMFC 'strongly endorsed' the five-point action plan agreed by the Group of Seven major economies on Friday.
The G7 pledged cooperation, decisive action and the 'use of all available tools to support systemically important financial institutions and prevent their failure'. 'The Fund (IMF) has asked for weeks, if not months, for more coordination in action, arguing that in such a crisis, cohesion and coordination was absolutely necessary,' Mr Strauss-Kahn said, stressing how serious the situation was for policymakers.
The IMF managing director also warned that the 'other crisis' developing countries face from soaring food prices should not be forgotten while the world grapples with the financial crisis.
Mr Strauss-Kahn said that although food costs had moderated in recent months, they are still much higher than they were 'and this bill is still unaffordable for poor countries'.
Donor country budgets are being strained as the financial crisis rips through markets and banks, slowing the economy, but Mr Strauss-Kahn called on them not to cut back on their aid commitments.
Poor countries 'absolutely need this money to avoid starvation'. The IMFC recognised that a number of emerging countries are vulnerable to the impact of the financial crisis, even if they have pursued sound economic policies in recent years.
'The difficult global financial environment, including elevated food and fuel prices, adds to the challenges for emerging market and developing countries to preserve macroeconomic stability, sustain growth, and make progress on poverty reduction,' it said in the statement.
The fast-moving global financial crisis has sparked a new sense of urgency for international cooperation.
Central bank chiefs and finance ministers of the Group of 20, a grouping that includes both rich and emerging nations such as Brazil, China, India and Russia are to hold a meeting at the IMF later on Saturday.
French President Nicolas Sarkozy, the current president of the European Union, has called a eurozone summit in Paris on Sunday as European leaders appeared to move towards a British-style plan of partial bank nationalisation.
Mr Sarkozy and German Chancellor Angela Merkel vowed on Saturday to work together on the crisis plan.
Britain is not a member of the eurozone but Mr Sarkozy said he would meet British Prime Minister Gordon Brown separately at the Elysee Palace just two hours before the main summit in order to 'maximise the chances' of full European cooperation. -- AFP
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