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Japan signals broader bailout plan, markets firm
(Agencies)
Updated: 2008-10-21 14:49 Australia offered a counterpoint, with the head of the central bank saying that its aggressive interest rate cut this month and fiscal stimulus could cushion the domestic economy. "There is much more work to be done yet... but the world, it seems to me, is on a much better path," said Glenn Stevens, Australia's central bank governor. "The likelihood of a global catastrophe has in fact declined over the past couple of weeks." More US Stimulus? Federal Reserve Chairman Ben Bernanke on Monday backed more government spending to help the world's biggest economy through what could be an extended period of subpar growth. "With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke told Congress in his first endorsement of a second U.S. stimulus package. The White House said it too was open to a stimulus plan. In China, which is on track for its first year of single-digit growth since 2002, the economic assessment diverged from the bleak to the cautiously optimistic. The head of the National Development and Reform Commission, the country's top planning body, said China could maintain a pace of around 9 percent, offering some relief to the rest of the world from creaking U.S. and European economies. But Donald Straszheim, head of Roth Capital and a former chief economist at Merrill Lynch, said China's growth rate could slump to 6.5 percent, which would be its slowest pace since 1990. The International Labor Organization said on Monday that 20 million jobs will disappear by the end of 2009 because of the financial crisis, the worst since the 1930s Great Depression. Governments have promised $3.3 trillion, about equal to the annual economic output of Germany, to guarantee bank deposits and bank-to-bank lending, and in some cases have taken stakes in banks with toxic assets. Policy makers have tried to craft solutions on the fly, raising the risk of miscalculations. Australia's government was forced to defend its plan to guarantee bank deposits after a media report warned that the move had caused financial dislocation by prompting a rush of money from uncovered schemes into the back-stopped deposits. |
