ID :
44672
Sat, 02/07/2009 - 17:48
Auther :
Shortlink :
https://oananews.org//node/44672
The shortlink copeid
EMULATE M'SIA'S 1997/98 ASSET RECOVERY PLANS
KUALA LUMPUR, Feb 7 (Bernama) -- The United States and Western Europe should emulate Malaysia's swift move to set up agencies to rehabilitate "bad assets" which helped the country recover from the crippling 1997/98 Asian financial crisis.
In making the call, International Monetary Fund's managing director,
Dominique Strauss-Kahn, said that the cost of banking crises increases if
problems were not addressed quickly (and) "this is not the time for hesitation."
Malaysia's move to set up institutions such as Pengurusan Danaharta Nasional
Bhd and Danamodal Nasional Bhd to buy toxic assets and clean-up the financial
system could help turn around financial institutions severely affected by the
economic downturn and now requiring billions of dollars in bail-out money.
"However, even with this measures, it will take time to restore credit
growth, he said at the 44th SEACEN (The South East Asian Central Banks)
Governor's Conference here Saturday.
"Loss of confidence is now the central problem. Our central goal should be
to restore it. At the global level, this means that governments and central
banks need to act decisively so that investors once again feel confident about
the solvency of financial institutions," he said.
Central banks should also credibly commit to measures sufficient to
eliminate the risk a repeat of the great depression, said Strauss-Kahn.
"All governments need to act. Measures to clean up the banks and revive the
housing market in the United States are an important part of the solution, and
are needed urgently. But they are no longer enough," he warned.
To contain this crisis, a coordinated global response is much needed.
However, that does not mean that all countries should do the same thing, or
that there is a "one size fits all" solution.
"But policy response has to take into account the interconnectedness of
national economies and the fact that decisions taken in one country can have
profound effects on others.
"Protectionism is a clear danger," he said.
-- BERNAMA
In making the call, International Monetary Fund's managing director,
Dominique Strauss-Kahn, said that the cost of banking crises increases if
problems were not addressed quickly (and) "this is not the time for hesitation."
Malaysia's move to set up institutions such as Pengurusan Danaharta Nasional
Bhd and Danamodal Nasional Bhd to buy toxic assets and clean-up the financial
system could help turn around financial institutions severely affected by the
economic downturn and now requiring billions of dollars in bail-out money.
"However, even with this measures, it will take time to restore credit
growth, he said at the 44th SEACEN (The South East Asian Central Banks)
Governor's Conference here Saturday.
"Loss of confidence is now the central problem. Our central goal should be
to restore it. At the global level, this means that governments and central
banks need to act decisively so that investors once again feel confident about
the solvency of financial institutions," he said.
Central banks should also credibly commit to measures sufficient to
eliminate the risk a repeat of the great depression, said Strauss-Kahn.
"All governments need to act. Measures to clean up the banks and revive the
housing market in the United States are an important part of the solution, and
are needed urgently. But they are no longer enough," he warned.
To contain this crisis, a coordinated global response is much needed.
However, that does not mean that all countries should do the same thing, or
that there is a "one size fits all" solution.
"But policy response has to take into account the interconnectedness of
national economies and the fact that decisions taken in one country can have
profound effects on others.
"Protectionism is a clear danger," he said.
-- BERNAMA
