World Bank says made 'dumb judgments' in Asia
WASHINGTON, May 6 (Reuters) - World Bank President James Wolfensohn
said on Wednesday that "dumb judgments" by international banks
contributed to the financial crisis in Asia.
"Indonesia, Korea and Thailand were able to borrow without adequate
information, without adequate disclosure, very substantial amounts of
money from people like us," Wolfensohn told the Economic
Strategy Institute.
"Some dumb judgments were made. There is a lack of proper prudence.
There is a herd instinct," he told the conference.
Wolfensohn warned that social unrest in Indonesia and possibly in
other hard hit nations could destabilize their financial systems
further.
"You can fix a financial system, but unless you have a parallel
development in the social system you'll achieve very little," he said.
Wolfensohn said social unrest, even in a country with stable financial
markets, "inevitably will turn that financial market over."
Wolfensohn also told the conference it was critical for the U.S.
Congress to boost the International Monetary Fund's reserves.
"It is essential to give additional funding to the International
Monetary Fund," he said. The International Monetary Fund has
come in for a lot of criticism but also I believe is due a lot of
praise for being a stable and important force in this particular
moment in history when the system is being challenged."
* * *
Dear IMF,
Thanks a lot for all you've done. I'm sorry that we can't afford to
buy you a Hallmark's Mother's Day card, which you surely deserve.
Love,
The short sellers who have been killed by your
interference with Natural Selection,
and the long investors who will be killed in the
months to come. |
