TOPWRAP 6-Asia, Europe close ranks to ease financial crisis
October 26th, 2008 | by admin |* Asia, Gulf seek to boost confidence after new stocks rout
* Wen says must stop crisis hurting growth
* Gulf Arab policymakers discuss government role in finance
By Alan Wheatley and Elizabeth Piper
BEIJING/LONDON, Oct 25 (Reuters) - Asian and Europeanleaders closed ranks on Saturday to try to bolster confidenceamong investors who fear that a global credit crunch hasushered in a deep and damaging world recession.
The worst financial crisis in 80 years has forced countriesto work together to find ways to help shore up a financialsystem crippled by banks fearful of lending to each other.
But with evidence mounting that Europe is already inrecession, analysts fear that cooperation in shoring up bankingsystems could be threatened as governments begin to turn theirattention to reviving domestic demand.
“We must use every means to prevent the financial crisisimpacting growth of the real economy,” Chinese Prime MinisterWen Jiabao said at the end of a two-day summit of 43 Asian andEuropean leaders in Beijing.
Governments have pledged about $4 trillion to support banksand restart money markets to try to stem the crisis and areconsidering tougher financial rules to guard against anyrepeat.
Wen said countries needed to strike a balance betweeninnovation and regulation and between savings and consumption.
“We need financial innovation, but we need financialoversight even more,” he said, adding that China’s priority wasto spur domestic demand to ensure the country maintained fairlyfast, steady growth. [nPEK65719]
U.S. President George W. Bush, who will host a globalsummit on the financial crisis next month, said in a radioaddress on Saturday, “While the specific solutions pursued byevery country may not be the same, agreeing on a common set ofprinciples will be an essential step toward preventing similarcrises in the future.”
The International Monetary Fund on Saturday clearedManaging Director Dominique Strauss-Kahn of harassment,favoritism and abuse of power after an inquiry into his affairwith a subordinate.
The IMF had sought to deal with the Strauss-Kahn inquiryquickly so as not to distract the global financial firefighterfrom dealing with the international financial crisis.
GULF MEETING
In the Gulf, finance ministers and central bank governorssaid at a meeting on coordinating policy that they would lookat directing more government funds into banks and regionalstock markets, Al-Arabiya television reported. [nLP572538]
