Backgrounder: U.S. Financial Crisis
WASHINGTON, Oct. 11 (Xinhua) -- Deputy Governor of the People's Bank of China Yi Gang called for international cooperation here on Saturday to restore global financial stability.
"Our current priority is to enhance international cooperation to prevent further deterioration and spillover of the crisis and restore global economic and financial stability," Yi said.
The deepening and widening of the U.S. financial crisis have triggered a major global slowdown and escalating uncertainty, Yi Gang said in a statement at the 18th meeting of the International Monetary and Financial Committee (IMFC) held here Saturday.
While the advanced economies have slowed significantly since the U.S. sub-prime crisis, the emerging market economies have maintained robust growth but the deteriorating external environment is putting the resilience of their macroeconomic policies to the test, he said.
The crisis has underscored shortcomings in the financial markets, Yi said. He expressed his hope that the stabilizing measures of the advanced economies will have the positive effect of calming the markets and restoring confidence.
"China is willing to strengthen its cooperation with other countries and, through such joint efforts, we hope global financial stability can be safeguarded," he said.
In line with their status, Yi said, the major reserve currency issuing countries should shoulder the responsibility for preventing further spillovers and minimizing shocks to other economies -- especially to the emerging markets.
To promote balanced and steady global growth over the longer term, efforts should be made to advance structural reforms and increase savings, he pointed out.
The International Monetary Fund -- at the core of the international monetary system -- should carry out its mandate to safeguard global economic and financial stability, he said. The IMFC is the steering committee of the 185-nation lending institution.
Yi also noted that as the impact of the crisis on the real economy is much worse than expected and the recovery more protracted and difficult, the risks of deflation in some countries as a result of the credit crunch have increased significantly.
"It is imperative that the major advanced economies coordinate rapid implementation of bailout packages to avoid deflation and facilitate the global recovery," said Yi.
"However, we should be aware that the injection of liquidity from these emergency measures could be a potential source of inflation in the medium and long term," the deputy governor said.
China central bank pledges more cooperation to stem global financial crisis
BEIJING, Oct. 10 (Xinhua) -- China's central bank on Friday said it will continue international cooperation to tackle the global financial crisis and maintain market stability.
The pledge came two days after the People's Bank of China (PBOC) announced an interest rate cut in a co-ordinated global move to revive solvency in the international financial system. Full story
China central bank cuts interest rate, reserve requirement to stimulate economy
BEIJING, Oct. 8 (Xinhua) -- China's central bank on Wednesday announced cuts in both the interest rate and reserve-requirement ratio in the latest effort to boost the domestic economy amid worries over the deepening global financial crisis.
The deposit and lending rates would be lowered by 0.27 percentage points from Thursday and the reserve-requirement ratio would be down by 0.5 percentage points from Oct. 15, the People's Bank of China (PBOC) said. Full story
Bush: G7 to work together to cope with financial crisis
WASHINGTON, Oct. 11 (Xinhua) -- U.S. President George W. Bush said Saturday morning that seven Western countries -- the so-called Group of Seven industrialized countries (G7) -- will work together to cope with the current financial crisis spreading around the globe.
"All of us recognize that this is a serious global crisis and therefore requires a serious global response," Bush told reporters after a meeting with economic chiefs of the G7. Full story
G-7 announces plan to fight global financial crisis
WASHINGTON, Oct. 10 (Xinhua) -- Finance officials from the Group of Seven (G-7) announced here Friday a plan of action to battle the ongoing global financial crisis.
"The G-7 agrees today that the current situation calls for urgent and exceptional action," said a statement released by the U.S. Treasury Department announcing the plan of action. Full story
Bush: U.S. authority able to solve financial crisis
WASHINGTON, Oct. 10 (Xinhua) -- President George W. Bush said on Friday that the United States, together with other nations, can cope with the current financial crisis.
"The American people need to know: that the United States government is acting; we will continue to act to resolve this crisis and restore stability to our markets," Bush said at the White House. Full story
G-24: global financial crisis could dampen growth prospects in developing countries
WASHINGTON, Oct. 10 (Xinhua) -- A group of developing countries warned here Friday that the ongoing global financial crisis could dampen growth prospects in the developing world.
"Many emerging markets and developing economies are not immune to the spillovers of the ongoing global crisis, with some countries more affected than others," said the group of 24 countries (G-24) from Latin America, Asia and Africa in a communique following their meeting. Full story
