Leaders turn up volume on credit crunch ahead of G7
Written on April 8, 2008
Governments must act together to bandage up the global economy and prevent another credit crisis from infecting markets, top financial officials said on Monday, ahead of key talks between powerful economies this week.
The G7 group of industrialized nations meets in Washington on Friday under heavy pressure to finally come up with some solutions to months of financial market turmoil that have raised the specter of a worldwide economic downturn.
Presidents, prime ministers and finance ministers have been calling for a co-ordinated battle plan to stop the contagion, but so far details are sketchy and the practicalities of acting as one could also make it tricky turning words into action.
“The need for public intervention is becoming more evident,” International Monetary Fund chief Dominique Strauss-Kahn said in an interview with the Financial Times newspaper no qualifying payday advance faxless cash advance. “The crisis is global.”
Tighter, integrated regulations and more openness among banks are now seen as the best fix for the credit crunch rather than further co-ordinated central bank action and economic life support measures from governments.
Central banks have poured extra cash into the financial system and the U.S. Federal Reserve has slashed interest rates, but analysts argue while such moves might soothe nerves in the short term, they cannot repair damaged trust in markets.
G7 PRESSURE
The current crisis was triggered by a raft of defaults on U.S. mortgages and then gained momentum as investors lost confidence in the value of exotic, secondary credit investment instruments and the banks that conjured them up.
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