World crisis plan criticized as trading dawns

By Ros Krasny

CHICAGO (Reuters) - A package of economic rescue measures agreed by the world's major governments appeared to fall short of calming investors jangled nerves as the trading week dawned in Asia.

In early trading on Monday, the yen and U.S. dollar rose in a flight to safety on assessments that the meeting yielded no concrete moves to avert a looming global recession.

Governments from Washington to Beijing agreed Saturday to a host of fiscal and monetary steps to rescue the global economy but it was left to individual governments to tailor their response to their particular circumstances and troubled industries.

"Taken as a whole, it does not appear that the outcome of the summit will be sufficient to stem the financial crisis. This was a high bar from the start," said Marc Chandler, global head of currency strategy with Brown Brothers Harriman in New York.

In the United States, the lame-duck status of President George W. Bush's administration made guessing the likely ability of the Group of 20 economic summit to restore market confidence tougher.

President-elect Barack Obama sent emissaries to the weekend event, and issued a statement in support of a coordinated response to the global financial crisis.

The post-meeting statement from the grouping of major industrialized and developing countries contained a kitchen sink of reform pledges aimed at soothing volatile markets and calming consumers' worries.

It said that all financial markets, products and participants will be subject to supervision, vowed tougher accounting rules, a review of compensation practices and greater cooperation between national regulators.

Even the long-running Doha round of free-trade talks was given a new lease on life.

Canadian Prime Minister Stephen Harper termed the declaration enough to "give the markets reassurance."

Finance ministers were told to develop specific plans for implementing the recommendations. The first set of actions is to be completed by the end of March, and a follow-up meeting will be held by the end of April.

But others were skeptical.

"No concrete coordinated actions were announced that will change anyone's outlook for the world economy, inflation, exchange rates or interest rates as the markets reopen today," said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York.

U.S. investors took a "show-me" approach on Friday, dumping stocks to guarantee a second straight losing week for major indices. Friday's close in the S&P 100 index was the lowest on a weekly basis since 2003, and the broad-based index is down almost 10 percent in November alone.

In contrast to the promises of the world leaders, the final handful of big third-quarter U.S. earnings reports due this week are likely to come footnoted with warnings about tough times immediately ahead.