HIGHLIGHTS - G20, IMF/World Bank meetings in Washington

BRAZIL FINANCE MINISTER GUIDO MANTEGA AT BRICS NEWS CONFERENCE:

"The BRIC countries agreed that the international situation worsened. So far the crisis was mainly in developed countries, while the BRICS and other emerging market countries maintained their growth pace, without having their vital functions affected.

"There is a risk that the sovereign debt crisis of some countries become another financial crisis. We eased the 2008 crisis by fast and coordinated actions within the G20. We need to do the same now."

BANK OF JAPAN GOVERNOR MASAAKI SHIRAKAWA ON YEN RISE

'Global investors are seeking safer assets amid heightening uncertainty over the global economy, which is driving current yen rises. It's important to remove uncertainty over the global economy.'

SHIRAKAWA ON HOW GLOBAL STOCK FALLS COULD AFFECT JAPAN:

"Japan's economy is recovering steadily with output and exports bouncing back near levels before the March earthquake. On risks for the outlook for Japan's economy, they are affected by global economic developments. We have guided monetary policy taking this into account. We will closely watch how (global economic developments) will affect the outlook.'

AZUMI ON NATIONS HELPING THE EURO ZONE:

"Europe first needs to solve its problems by itself."

'Japan and the United States may be able to help Europe based on past experiences. In Japan's case, we were saddled with huge bad loans at banks which ended up being much bigger than what policy-makers initially estimated."

"When Europe deals with its sovereign risk problems, it's important for them to not underestimate the problem and to seek steps that gives confidence to markets.'

"If Europe gives more clear direction on how to rescue Greece, Japan may consider further support. We are already buying about 20 percent of EFSF bonds but that's not to say we will not increase the amount"

IMF SPECIAL ADVISER JOHN LIPSKY ON EURO BAILOUT AND BRICS

Asked about Canada's suggestion that 1 trillion euros may be needed for European bailout fund: "We haven't suggested a specific amount. What we have suggested is that it is clear that the capital underpinnings of the European banking system will need to be bolstered...Most important is clarity of intention and political will and availability of resources to convince markets that the banking system will be effectively underpinned."

"There are a lot of unknowns, but clearly the euro zone's problems are manageable, but they require clear management."

FRENCH ECONOMY MINISTER FRANCOIS BAROIN:

"The (G20) meeting is to coordinate our response on stabilising the euro zone and on stimulating global growth."

"Liquidity problems at European banks have been tackled by central bank actions last week."

On the euro zone: "Our strategy has not changed, it is still to implement the July 21 agreement as quickly as possible.

"The main issue (for the euro zone) is reducing deficits as quickly as possible. Leveraging the EFSF is not a priority for now, we could eventually consider how to leverage it to give it more systemic firepower."

EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLIE REHN, ON POSSIBILITY OF GREEK DEFAULT:

"Giving the impression that an orderly restructuring of Greek debt can be done in a neat and tidy way is somewhat illusory to my mind. As I said before, we are not seeing a Greek default as a plausible scenario, and we will not let Greece down to a disorderly default."

"We need to recapitalize vulnerable banks in Europe."

REHN ON IMF ESTIMATES OF EUROPEAN BANK RECAPITALIZATION NEEDS

"It's essential that we continue to work in order to ensure sufficient recapitalization of European banks. In this regard we do not share the numbers of the IMF which have been published today and leaked three weeks ago. We share the same concern and I can just say that is a work in progress."

REHN ON ITALY REFORMS

"In terms of fiscal policies, for the moment, it is very difficult to demand more from Italy while at the same time it would be extremely important that Italy take further decisions on structural reforms to boost economic growth."

REHN ON EUROBONDS

"Before we can even seriously contemplate a kind of eurobonds alternative, we need to substanatially reinforce economic and fiscal surveillance in the European Union."

IMF MANAGING DIRECTOR CHRISTINE LAGARDE ON BALANCING ACT:

"What needs to happen is that medium-term, long-term, solid well-anchored measures that will actually aim at restoring good public finances by reducing deficits, by stabilizing debt and gradually reducing it, has to be first and at the forefront of any agenda in those economies. But, having said that, as long as in the long and medium term this is well anchored, some countries can accommodate growth in the short-term. If you're asking me which country clearly the United States is one that comes to mind right away. There has to be a parallel track of what can accommodate growth in the short term by slowing down the pace of consolidation and how strongly and definitely and well anchored are the measures that will deliver deficit reduction in the longer term."

WORLD BANK PRESIDENT ROBERT ZOELLICK ON IMPACT OF CRISIS ON DEVELOPING ECONOMIES:

"While developed countries stumble the situation for emerging markets may be changing for the worse. Since August we've seen bond spreads for emerging markets increase, their equity markets have declined like developed markets and capital flows have declined sharply.

"Now falling markets and declining confidence could prompt slippage in developing countries' investment and a possible pullback their consumers too."

ZOELLICK ON THREAT OF RISING PROTECTIONISM

"Developing countries face increasing headwinds. If the situation deteriorates further then developing countries' growth could turn down, their asset prices could drop and then their nonperforming loans could increase. With these pressures and prospects we have to anticipate possible protectionist pressures, beggar-they-neighbor policies and a risk of a retreat to Populism"

ZOELLICK ON POSSIBILITY OF A DOUBLE-DIP RECESSION

"I still think a double dip recession for the world's major economies is unlikely, but my confidence in that is being eroded daily by the steady drip of difficult economic news.

"A crisis made in the developed world could become a crisis for developing countries. Europe, Japan and the United States must act to address their big economic problems before they become bigger problems for the rest of the world. Not to do so is irresponsible."

U.S. TREASURY SECRETARY TIMOTHY GEITHNER ON TWO CLOUDS OVER GLOBAL ECONOMY:

"The two other clouds still over us are the European crisis and the deep concern that you can see across the world and around the country about whether the political system in the United States is up to the challenges we face.

"Not just the near term challenges of supporting an economy still healing from crisis, but the long-term challenges of growth and competitiveness and fiscal sustainability."

GEITHNER ON FISCAL CONSOLIDATION:

"The major economies are all in very different circumstances ... What the (Obama jobs) package does is reduce the risk that the government is actively hurting growth, weakening growth, by contracting much too quickly, but the path at which governments reform and restore sustainability will depend on the specific circumstances they are facing. Some countries are going to need to move more quickly, have no alternative, but many of the other major economies have more room, more choice, to soften that path of fiscal consolidation so they are not hurting the economy as it recovers."

GEITHNER ON CONFIDENCE EUROPE WILL EXPAND EFFORTS:

"You're going to see them act with more force in the coming weeks and months. ... I am very confident they're going to move in the direction of expanding the effective financial capacity of that set of financial ring fences because they have no alternative and they recognize that and they're going to do it, they're just trying to figure out how to get there in a way that is politically attractive."

GEITHNER ON U.S. CONCERNS ON CHINA'S TRADE, CURRENCY:

"We have a very strong interest in China continuing to let its exchange rate appreciate, as it has been doing ... but we would like them to move faster. They have a ways to go."

"Now, that's not our only concern with China. We're seeing China continue to be very, very aggressive in a strategy they started several decades ago, which goes like this: you want to sell to our country, we want you to come produce here; if you want to come produce here, we want you to export from China; if you want to come produce here, you need to transfer your technology to us. And they have made possible systematic stealing of intellectual property of American companies and have not been very aggressive to put in place the basic protections for property rights that every serious economy needs over time."

(Washington newsroom +1-202-898-8310)