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HIGHLIGHTS 6-Comments ahead of the G7 meeting
April 11, 2008 / 1:32 PM / 9 years ago

HIGHLIGHTS 6-Comments ahead of the G7 meeting

WASHINGTON, April 11 (Reuters) - Finance ministers and central bankers from the top industrialized countries are meeting on Friday to discuss the global credit crisis.

Their meeting began at mid-afternoon, with a communique to be issued about 6:30 p.m. (2230 GMT).

Following are highlights from their comments before the Group of Seven meeting.

For more stories from the G7 meeting, see [G7/G8].

ON FOREIGN EXCHANGE:

German Finance Minster Peer Steinbrueck

When asked whether there was the possibility of any currency intervention or coordinated action on foreign exchange, Steinbrueck said, “No.”

Canada Finance Minister Jim Flaherty:

“I am sure we will revisit today the issue of imbalances in terms of lack of flexibility of the currencies of some of the emerging economies including China and particularly now in a time of global volatility and turbulence.”

“I intend to raise it (the issue of imbalances) today and I am sure we will hear back from some of the other participants.”

“There is concern of course with currency volatility. The decline in the value of the U.S. dollar has been borne primarily by the Canadian dollar and also by the euro and the yen as well so I imagine we will have some discussion about that today and it will be referenced in the communique.”

UK Chancellor of the Exchequer Alistair Darling:

“Currencies are discussed regularly and I dare say will continue to be discussed again. And as we continue to monitor these things people recognize that there are some things governments can do and some things governments can‘t.”

Japanese Finance Minister Fukushiro Nukaga:

“We of course exchanged views about the currency market as part of discussions on the global economy and financial markets. But I would like to refrain from commenting further at this point,” he said after meeting with U.S. Treasury Secretary Henry Paulson.

ON THE CREDIT CRISIS:

Canada Finance Minister Jim Flaherty:

“There are some short-term discussions that I‘m sure will take place about valuations. There is a school of thought that says that fair value perhaps ought to be modified that mark-to-market is too strict a rule in some circumstances where there is no market or you’re marking to a model or where transactions are only happening in stressed situations, and so they’re not reflecting a true market. Quite frankly I think we need to keep to the traditional rules on that in order to make sure that we don’t make matters worse. Counterparties need to know that everybody’s playing by the same rules in terms of valuation. That’s what I‘m going to advocate.”

“I expect that the recommendations of the forum (Financial Stability forum) will be accepted and may include guidelines on disclosure, but that’s looking at the longer term.”

UK Chancellor of the Exchequer Alistair Darling:

Darling said there were no proposals for a government to buy up mortgage-backed securities before the G7 meeting this weekend. But “We should be ready to look at any options to reopen these markets. ... It would be quite wrong to rule out any options at this stage. However, options have to be practical. They have to be workable.”

German Finance Minster Peer Steinbrueck:

“I am very satisfied with this (Financial Stability Forum) report, because it contains of quite a number of very concrete measure. ... These measures should be implemented as soon as possible.”

On efforts of banks and rating agencies to find voluntary solutions to the financial crises: “this is helpful, but not sufficient. ... Politics have to play their role to.”

UK Chancellor of the Exchequer Alistair Darling:

“Today we must commit to implementing the Financial Stability Forum report fully and quickly.”

“We should not hesitate to take action if the market-led response proves inadequate.”

Japanese Finance Minister Fukushiro Nukaga:

”If you mean, by saying public funds, an injection of capital into financial institutions, then the United States is taking various policies based on the view that there are many things to be done before that.

“We have a broad, mutual understanding that each country should take appropriate and timely policies depending on its (economic) situation, without ruling out any options, to ease worries in the financial market and to strive toward a global economic expansion.”

ON THE ECONOMY:

Canada Finance Minister Jim Flaherty:

“In terms of the Canadian perspective we still have economic growth and we’re comfortable with our budget projections.”

UK Chancellor of the Exchequer Alistair Darling:

“There are a number of key differences between the U.K. and U.S. housing markets, which mean that the U.K. housing market is unlikely to experience problems in the way that the property market in the U.S. has been affected.”

“In the U.S. the falls in housing prices are being driven by a very large overhang of unsold houses. In the U.K, by contrast, housing supply has not kept pace with demand.”

“While the U.K. also has a subprime mortgage sector it is much smaller than that in the U.S.”

“These are uncertain times. There are huge challenges ahead. All major economies will see slower growth this year.”

ON FOOD/OIL PRICES:

UK Chancellor of the Exchequer Alistair Darling:

“There has been upward pressure on food prices over the last few months. ... We cannot allow ourselves to get into a situation where food prices keep going up and up.”

“Oil prices have been above $100 a barrel in recent months, And food and metal prices have increased sharply, too. This is bringing new inflationary pressures.”

“Central banks have made coordinated efforts to improve liquidity in money markets. ... We must ensure that we continue to do whatever is necessary to maintain confidence in the financial markets.”

German Finance Minster Peer Steinbrueck:

On worldwide food prices -”A monster is stepping up on the political stage.“ It will be a big issue at the World Bank meetings. ”This is a very fundamental problem.

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