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France and Japan help banks, IMF prepares aid
(Agencies)
Updated: 2008-10-21 22:44 IMF to act Pakistan is expected to seek a multi-billion-dollar rescue package from the IMF and other bodies to avert a balance of payments crisis when officials meet in Dubai on Tuesday. "Immediately, we don't need more than $10-$15 billion," Shaukat Tarin, the prime minister's economic affairs adviser, told Dawn News television channel. Pakistan is in a critical condition, with the central bank holding barely enough foreign currency to cover six weeks of imports and inflation running at 25 percent. Iceland, driven close to bankruptcy as frozen credit markets caused its banks to fail, is still deciding whether to take IMF money although the FT reported it was set to receive a $6 billion IMF-led rescue package soon. Ukraine is in talks over an IMF loan of up to $14 billion and Prime Minister Yulia Tymoshenko said: "we have practically concluded our negotiations with the IMF." World leaders will hold a summit after the November 4 US presidential election to set "principles of reform" needed to fix the financial system. The role of the IMF as global financial guardian is likely to be prominent on that agenda. EU leaders will try to convince China and India in talks in Beijing this week to join the summit. France also wants more regular meetings of leaders of the 15-nation euro zone. "It's not possible for the euro zone to continue without clearly identified economic governance. We cannot continue in this way," French President Nicolas Sarkozy, who holds the European Union presidency, told the European Parliament. Stocks up, policymakers updateThe FTSEurofirst 300 index of top European shares rose 1.2 percent, extending its winning streak to a third day, as investors cheered the French move to bolster its banks. Shares on Wall Street climbed on Monday after Federal Reserve Chairman Ben Bernanke backed more government spending to help the economy. But US stock futures pointed to a lower opening on Tuesday, of around 1.0-1.2 percent. On the whole, policymakers sounded more upbeat. European Central Bank Executive Board member Juergen Stark said more "accidents" might occur in the global financial system but government actions had left Europe better placed to cope. The head of Australia's central bank said a sharp interest rate cut this month and fiscal stimulus should buoy the economy. "The likelihood of a global catastrophe has in fact declined over the past couple of weeks," said Glenn Stevens, Australia's central bank governor. |
