WASHINGTON, April 12 The following are
highlights of the International Monetary Fund and World Bank
meetings on Saturday in Washington, where finance ministers,
central bankers and other top officials are gathering.
EUROPEAN CENTRAL BANK PRESIDENT MARIO DRAGHI
ON DEFLATION CONCERNS RAISED:
"It was not only the IMF, no, we heard concerns about this
low inflation also from other advanced countries ... It has to
be placed in perspective, but at the same time I said we
shouldn't be complacent."
ON EURO ZONE ECONOMY:
"The recovery is proceeding, it's modest and the recent
survey data seem to say that even the first quarter of this year
will show positive growth."
"Low inflation is supporting the real disposable incomes of
a part of the world where the percentage of retired people is
ON MONETARY POLICY AND EXCHANGE RATE:
"In a sense, if you want our monetary policy to remain as
accommodative as it is today, a further strengthening of the
exchange rate, I don't want to give you a level where we will
act or not, I am giving you an orientation, would require
further monetary policy stimulus."
ON GREECE'S RETURN TO BOND MARKETS
"I think the return of Greece to the bond market is a
welcome episode and certainly it shows that markets appreciate
the very significant progress that's been achieved by the Greek
government and the Greek population."
IMF MANAGING DIRECTOR CHRISTINE LAGARDE
ASKED ABOUT THE IMF'S "PLAN B" IF THE U.S. CONGRESS DOESN'T
APPROVE IMF REFORMS BY YEAR END:
"Plan A is going to be explored to the end, and in depth,
but if that plan A doesn't work, then we will worry about plan
ON POSSIBILITY OF ECB EASING:
"We are encouraged to see that the ECB, and to have read, to
have heard from the president of the ECB, that they appreciate
that low inflation is an issue ... and we were very encouraged
to hear that the ECB has available, and will use in due course
and if necessary, the appropriate tools to deal with it."
GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE
ON IMF REFORMS:
"It was remarkable that at the IMF meeting as at the G20 the
need for structural reforms played a prominent role."
ON MARKET REACTION TO GREECE'S RETURN TO CAPITAL MARKETS:
"I have said they exaggerate ... The same way they overshot
some years ago on the negative side they are overshooting now to
the positive side."
ALGERIAN CENTRAL BANK GOVERNOR MOHAMMED LAKSACI
ON EUROZONE DEFLATION RISK:
"The risk posed by a very low inflation, possibly leading to
deflation similar to the experience of Japan in the 1990s, is a
source of concern and should be appropriately addressed through
more accommodative monetary policy."
GERMAN CENTRAL BANK PRESIDENT JENS WEIDMANN
ON IMF REFORMS:
"I am personally skeptical about the chances for the interim
steps which are presently discussed."
THARMAN SHANMUGARATNAM, CHAIRMAN OF THE INTERNATIONAL
MONETARY AND FINANCIAL COMMITTEE
ON INTERNATIONAL SAFETY NET:
"One of the areas ... in international finance that is
missing is a space that provides quick assistance, quick
liquidity in times of crises to well-managed countries without
conditionality, because they are well-managed and pre-qualified
for such purpose but which can reduce the need over time for
developing economies to build up their own reserves at the cost
"That's the real objective. Ultimately it's about growth and
an international safety net. A well-designed international
safety net will avoid the need for each country to build up its
own safety net. That's one of the issues that's coming out,
JAPANESE FINANCE MINISTER TARO ASO
ON FEDERAL RESERVE TAPERING:
"Recent progress in the U.S. Federal Reserve's tapering stem
from the recovery of the U.S. economy and this trend should
basically be welcomed. On the other hand, the effect of the
Fed's tapering on emerging market economies and other economies
should continue to be properly addressed."
ON EURO ZONE:
"In the euro area, there are stronger signs of economic
recovery, but, as the IMF has pointed out, the risk of deflation
should continue to be carefully monitored. Japan experienced a
protracted period of deflation in recent years.
"Based on our experience, once a deflationary mindset takes
hold, it is easy to fall into a vicious cycle, whereby people
start to postpone consumption and investment, leading to further
deflationary pressures. So, it is desirable to implement
aggressive macroeconomic policies before the economy falls into
BRAZILIAN FINANCE MINISTER GUIDO MANTEGA
ON ECONOMIC CONDITIONS AND MONETARY POLICY IN THE EURO ZONE:
"The Fund is recommending more monetary easing to the ECB,
and rightly so. Deflationary pressures are of special concern."
"In southern euro-area countries policy interest rates - in
real terms - are substantially higher than growth, creating
hardship for countries striving to ensure debt sustainability
and gain competitiveness within a monetary union. High real
interest rates amplify debt burdens, making it difficult to
implement growth-enhancing measures."
ON U.S. INTEREST RATE NORMALIZATION:
"Real interest rates in the United States have begun to rise
and will probably continue to increase. If this occurs gradually
and as a consequence of economic recovery, it may not be a
concern for emerging market economies and developing countries."
"The transition to a post-crisis world economy has only
started and can still create zones of turbulence and
instability, especially for emerging markets."
ON TENSION BETWEEN POLICIES IN ADVANCED ECONOMIES AND
EMERGING MARKET ECONOMIES AND DEVELOPING COUNTRIES:
"The perception that AEs (advanced economies) are
'naval-gazing' and that EMDCs (emerging market and developing
countries) are 'on-their-own' creates incentives to build up
reserves, strive for competitive exchange rate, contain current
account deficits and adopt capital flow measures. EMDCs will
probably continue to follow these routes, according to
individual country circumstances. But the question we should all
ask is whether the simultaneous adoption of these policies by a
large number of countries will lead to a favorable outcome for
the world economy as a whole."
BANK OF ITALY GOVERNOR IGNAZIO VISCO
ON MONETARY EASING IN EUROPE:
"There may be various combinations and the ECB ... is
putting this together. Then, there is the issue of timing - it
depends. Obviously, we are considering, we are preparing a
number of options, a number of possibilities, in both
conventional and non-conventional policies. Why limit that to
non-conventional? And (we are considering) if its needed - that
is fundamental. But if it is needed then I believe the whole
council is unanimously behind the decisions that would be
ITALIAN ECONOMY MINISTER PIER CARLO PADOAN
"The issue was discussed in broad terms. There was of course
a recognition of something which is well-known to everybody: the
interdependencies between Ukraine, Russia and other economies is
SWISS FINANCE MINISTER EVELINE WIDMER-SCHLUMPF
ON IMF CALL FOR EASY MONETARY POLICY TO COMBAT LOW INFLATION
"The recommendation for accommodative monetary policies in
advanced countries is too broad. It should be more nuanced. The
possible risks posed by too low inflation should be more
thoroughly qualified by taking into account the precise
structural, economic, financial and monetary conditions of the
region or the country in which it occurs. By contrast, we would
highly welcome a clearer acknowledgement of potential risks to
financial stability arising from prolonged monetary easing."
IMF STEERING COMMITTEE COMMUNIQUE
ON GLOBAL ECONOMY:
"Global activity continues to strengthen. However, the
recovery is still fragile and downside risks remain. Creating a
more dynamic, sustainable, balanced, and job-rich global economy
remains our paramount collective goal."
ON MONETARY NORMALIZATION AND SPILLOVERS:
"Monetary policy settings in major countries should continue
to be carefully calibrated and clearly communicated, with
cooperation among policymakers to help manage spillovers and
spillbacks. Monetary policy in advanced economies should provide
the necessary accommodation, with the eventual normalization
being conditional on the outlook for price stability and
SPANISH ECONOMY MINISTER LUIS DE GUINDOS
"Our view in Spain is that there really is no risk of
deflation, not in Europe or in Spain."
CHINESE VICE FINANCE MINISTER ZHU GUANGYAO
"This is a geopolitical issue too. We hope that event of
geopolitical risk won't cause a big shock for the global
economy, particularly for ... Europe's economy."
"That's why we support any action necessary to calm down the
tension and to stabilize the economy, including Ukraine's
ON IMF REFORMS:
"During the period before the end of the year, we are
certainly continuing very full cooperation with the IMF and we
hope this difficult time - particularly Ukraine - the IMF plays
quick and strong action ... We support that."
BRITISH FINANCE MINISTER GEORGE OSBORNE
ON THE GLOBAL ECONOMIC OUTLOOK:
"Significant downside risks remain and some new risks have
emerged, including an increase in geopolitical tensions, notably
with the situation in Ukraine. In order to safe-guard the global
recovery, policymakers must continue to build their economies'
resilience by implementing much needed reforms, tackling
underlying vulnerabilities and ongoing efforts to reduce public
ON GLOBAL MONETARY POLICY WORLDWIDE:
"As part of the global recovery, policymakers should
communicate their expectation of higher financial market
volatility, which is currently below historical norms. This
should help ensure a common understanding and a reflection in
ON EMERGING MARKETS:
"The immediate priority for EMs is to address policy and
institutional weaknesses where they exist and strengthen
macroeconomic fundamentals. Strong macroeconomic policy
frameworks and structural reforms can support sustainable growth
and build resilience to economic shocks."
(Compiled by Reuters' G20/IMF team)