Jump to content
House Price Crash Forum
Sign in to follow this  
cashinmattress

We're Not Remotely Through Crisis: World Bank Chief

Recommended Posts

We're not remotely through crisis: World Bank chief

WASHINGTON: World Bank President Robert Zoellick said on Tuesday that financial markets are showing signs of stabilization, but warned that the

global crisis was far from over in developing countries. Speaking to reporters ahead of a meeting of finance ministers from Latin America, Zoellick said developing countries were only now feeling the full force of the global economic and financial crisis, which could quickly return to advanced economies where it began.

He said demand for World Bank financing was high and growing as credit markets remained shut to many developing market clients.

"There seems some opportunities for improvement on the financial market side, but there is still great uncertainty about the scope and timing of recovery," Zoellick told reporters on a conference call "There are risks that could threaten the turnaround and I have emphasized the world needs to recognize that dangers will come in waves," he said. Zoellick was speaking ahead of a meeting of finance ministers from Latin America in Chile on July 2.

"A number of developing countries remain under significant stress," he added. Zoellick said the strength of the recovery and the potential for setbacks depends a lot on how policy-makers cope with risks, including in banking systems, protectionism and financing of rollover debt of private-sector companies. The World Bank estimated in March that well over $1 trillion in emerging market corporate debt and $2-3 trillion in total emerging market debt will mature in 2009, the majority of which reflects claims of major global banks extended across borders or through affiliates in emerging markets.

Zoellick said developing countries faced a total financing shortfall in the range of $350 billion to $635 billion, of which $178 is in Latin America. He said demand for financing from the World Bank was increasing in part because developed countries have guaranteed so much debt that it is crowding out "good developing country" debt. "Even if they can go to the markets and go sometimes to their domestic markets, it will crowd out their private sector," Zoellick said, "So, I remain quite cautious about the overall state of the recovery. I don't think we're remotely through this.

"We remain in a situation where we have to be very alert to dangers because there are significant risks out there, and we are finding that the demand for our resources from all of our different instruments ... remains high and growing," he added. Zoellick said he would discuss with Latin American finance ministers ways to bolster the World Bank's capital base.

This could include possible early replenishment of money for the Bank's facility that provides low-cost loans and grants to 78 of the world's poorest countries, 39 of which are in Africa.

Hmm.

Share this post


Link to post
Share on other sites

All expansion is linked to debt.

Debt growth has created large distortions in economic efficiency and has created quick short term growth that is unsustainable in the long term.

US debt has been rapidly increasing for 25 years this has been the driving force behind the global economy and now it's imploding.

This is not over by a long way yet.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   295 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.