G-7 to debate ways to stabilize financial markets
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TOKYO, Sept. 21 — Group of Seven financial chiefs will discuss ways to stabilize the unsettled global financial markets when they huddle for their regular meeting in Washington in mid-October, a senior Japanese official said Friday.
‘’The G-7 will debate various policy issues to restore stability in global financial markets based on a report to be submitted by the Financial Stability Forum, which advises the G-7,'’ Vice Finance Minister for International Affairs Naoyuki Shinohara told reporters.
He said there is no doubt that a joint statement to be issued after the October G-7 talks will address the ongoing problem stemming from the U.S. subprime mortgage woes.
Shinohara, Japan’s top currency official, also indicated that finance ministers and central bank governors from Britain, Canada, France, Germany, Italy, Japan and the United States will explore comprehensive measures in a relatively long time frame rather than scramble for a makeshift remedy.
‘’The G-7 nations have agreed to discuss the (subprime) issue in October, next February and April, at which times they are scheduled to hold regular meetings,'’ he said.
More specifically, Shinohara said the G-7 financial chiefs will likely discuss four points: risk management in complicated financial products, how to treat structured products in accounting, the role of credit-rating agencies in securitized products and appropriate supervision of financial entities dealing with securitized products.
He said global financial markets appear to restore calmness slightly but added that the G-7 nations will remain vigilant about the market movement.
Asked about the recent sharp appreciation of the euro against the U.S. dollar and other currencies, Shinohara said he still sees ‘’high volatility'’ in currency markets, although the situation is less volatile than it was relatively recently.
He also said the fundamentals of the U.S. economy remain strong, though adjustments in the housing sector are likely to take some more time.
The upcoming G-7 talks are expected to be held on the sidelines of annual meetings of the International Monetary Fund and the World Bank in Washington.
Filed by Ivana Jankovic under Global Financial Crises, Financial Supervision, Corporate and Public Governance