Japan Finance Minister, Bank Head Laud G7 Action Plan
October 11, 2008
BBC Monitoring Newsfile
Kyodo - The finance ministers and central bank governors of the Group of Seven economies vowed Friday to use all available tools, including public capital injection, to fight the worldwide credit crunch and prevent "systemically important financial institutions" from failing.
The G-7 financial leaders, who met in Washington amid a global financial calamity, released their action plan after their one-day meeting, agreeing to ensure that major financial intermediaries "can raise capital from public and as well as private sources" as needed to permit them to continue lending to households and businesses.
US Treasury Secretary Henry Paulson pledged to work out a plan to inject public money into troubled banks and other financial institutions by purchasing their stock.
We are developing strategies to use the authority to purchase and insure mortgage assets and to purchase equity in financial institutions, as deemed necessary to promote financial market stability," Paulson said at a news conference after the G-7 meeting.
The financial chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States said they are committed to "working together to stabilize financial markets and restore the flow of credit to support global economic growth."
The G-7 said it will "take decisive action and use all available tools to support" important financial entities and pledged to "take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding."
It also committed itself to ensuring each of its respective member national deposit insurance and guarantee programmes are robust and consistent so that "retail depositors will continue to have confidence in the safety of their deposits."
The action plan was unveiled at a time global financial markets are rocked by investor panic stemming from the US-triggered credit turmoil.
At a press conference, Japanese Finance Minister Shoichi Nakagawa said he believes global economic and financial conditions "have seriously deteriorated" since the previous G-7 meeting in April.
Nakagawa said he expects the concise plan of action that came out this time rather than the usual statement will serve as evidence that the seven major economies "did their best to find a way out of the current stringent economic circumstances" and appeal to market participants.
Bank of Japan Governor Masaaki Shirakawa, who met the press with Nakagawa, said the action plan indicates that it is vital to "prevent the systemic risk from materializing" and that the G-7 nations agreed to "implement appropriate fiscal and monetary steps when needed."
Nakagawa said that although the action plan made no reference to fluctuations on the currency market, the G-7 economies did discuss the issue and reaffirmed that excessive movements are undesirable.
BOTh the minister and central bank governor said Japan talked about its experience of overcoming a financial crisis in the late 1990s and the early 2000s as advice for dealing with the current turmoil.
Nakagawa said he sees it as "major progress" and "one of the strongest G-7 messages" that the United States and its fellow G-7 members pledged public fund injection into ailing financial bodies - the policy Japan adopted during its own crisis.
Shirakawa said the G-7 representatives referred to the Japanese case of coping with its major financial crisis many times, along with the case of similar crises in Northern Europe.
Nakagawa said the G-7 took note of Japan's proposal of creating a scheme under the International Monetary Fund to support emerging economies hit by the financial crisis.
In the G-7 action plan, the seven nations strongly support the IMF's critical role in assisting countries affected by the financial turmoil.
Earlier in the day, US President George W. Bush pledged in his speech just before the G-7 talks that the United States will "continu e to act to resolve this crisis and to restore stability to our markets."
He indicated the US government is positive about helping banks rebuild capital by purchasing their equity.
The (Treasury) Department will implement measures that have maximum impact as quickly as possible," he said.
Japanese Prime Minister Taro Aso said Tokyo is ready to host a meeting of leaders from the Group of Eight countries if the G-7 meeting fails to come up with support measures for emerging nations.
The G-8 consists of the G-7 members plus Russia.
The G-7 financial chiefs examined progress in their efforts to strengthen the efficiency and resilience of global financial markets in line with recommendations by the Financial Stability Forum, an advisory body to the seven industrialized economies.
In its report issued April 11, during the previous G-7 meeting, the FSF called on financial institutions to implement "stress tests" to better prepare for crises and urged them to fully and promptly disclose their risk exposure within 100 days.
The forum, chaired by Bank of Italy Governor Mario Draghi, also sought in April the joint monitoring of large global financial institutions by an international group of supervisors by the end of 2008 to enhance risk management.
The G-7 nations continued to discuss the global financial turmoil at a dinner hosted by Paulson.
Originally published by Kyodo News Service, Tokyo, in English 0129 11 Oct 08.
(c) 2008 BBC Monitoring Newsfile. Provided by ProQuest LLC. All rights Reserved.
A service of YellowBrix, Inc.
Kyodo - The finance ministers and central bank governors of the Group of Seven economies vowed Friday to use all available tools, including public capital injection, to fight the worldwide credit crunch and prevent "systemically important financial institutions" from failing.
The G-7 financial leaders, who met in Washington amid a global financial calamity, released their action plan after their one-day meeting, agreeing to ensure that major financial intermediaries "can raise capital from public and as well as private sources" as needed to permit them to continue lending to households and businesses.
US Treasury Secretary Henry Paulson pledged to work out a plan to inject public money into troubled banks and other financial institutions by purchasing their stock.
We are developing strategies to use the authority to purchase and insure mortgage assets and to purchase equity in financial institutions, as deemed necessary to promote financial market stability," Paulson said at a news conference after the G-7 meeting.
The financial chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States said they are committed to "working together to stabilize financial markets and restore the flow of credit to support global economic growth."
The G-7 said it will "take decisive action and use all available tools to support" important financial entities and pledged to "take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding."
It also committed itself to ensuring each of its respective member national deposit insurance and guarantee programmes are robust and consistent so that "retail depositors will continue to have confidence in the safety of their deposits."
The action plan was unveiled at a time global financial markets are rocked by investor panic stemming from the US-triggered credit turmoil.
At a press conference, Japanese Finance Minister Shoichi Nakagawa said he believes global economic and financial conditions "have seriously deteriorated" since the previous G-7 meeting in April.
Nakagawa said he expects the concise plan of action that came out this time rather than the usual statement will serve as evidence that the seven major economies "did their best to find a way out of the current stringent economic circumstances" and appeal to market participants.
Bank of Japan Governor Masaaki Shirakawa, who met the press with Nakagawa, said the action plan indicates that it is vital to "prevent the systemic risk from materializing" and that the G-7 nations agreed to "implement appropriate fiscal and monetary steps when needed."
Nakagawa said that although the action plan made no reference to fluctuations on the currency market, the G-7 economies did discuss the issue and reaffirmed that excessive movements are undesirable.
BOTh the minister and central bank governor said Japan talked about its experience of overcoming a financial crisis in the late 1990s and the early 2000s as advice for dealing with the current turmoil.
Nakagawa said he sees it as "major progress" and "one of the strongest G-7 messages" that the United States and its fellow G-7 members pledged public fund injection into ailing financial bodies - the policy Japan adopted during its own crisis.
Shirakawa said the G-7 representatives referred to the Japanese case of coping with its major financial crisis many times, along with the case of similar crises in Northern Europe.
Nakagawa said the G-7 took note of Japan's proposal of creating a scheme under the International Monetary Fund to support emerging economies hit by the financial crisis.
In the G-7 action plan, the seven nations strongly support the IMF's critical role in assisting countries affected by the financial turmoil.
Earlier in the day, US President George W. Bush pledged in his speech just before the G-7 talks that the United States will "continu e to act to resolve this crisis and to restore stability to our markets."
He indicated the US government is positive about helping banks rebuild capital by purchasing their equity.
The (Treasury) Department will implement measures that have maximum impact as quickly as possible," he said.
Japanese Prime Minister Taro Aso said Tokyo is ready to host a meeting of leaders from the Group of Eight countries if the G-7 meeting fails to come up with support measures for emerging nations.
The G-8 consists of the G-7 members plus Russia.
The G-7 financial chiefs examined progress in their efforts to strengthen the efficiency and resilience of global financial markets in line with recommendations by the Financial Stability Forum, an advisory body to the seven industrialized economies.
In its report issued April 11, during the previous G-7 meeting, the FSF called on financial institutions to implement "stress tests" to better prepare for crises and urged them to fully and promptly disclose their risk exposure within 100 days.
The forum, chaired by Bank of Italy Governor Mario Draghi, also sought in April the joint monitoring of large global financial institutions by an international group of supervisors by the end of 2008 to enhance risk management.
The G-7 nations continued to discuss the global financial turmoil at a dinner hosted by Paulson.
Originally published by Kyodo News Service, Tokyo, in English 0129 11 Oct 08.
(c) 2008 BBC Monitoring Newsfile. Provided by ProQuest LLC. All rights Reserved.
A service of YellowBrix, Inc.
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