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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (29376)	10/19/1999 1:33:00 PM
From: Rich1	Read Replies (1) \| Respond to of 50167

OJ what time is AG speaking? TIA.

To: Jerry Olson who wrote (29376)	10/19/1999 2:47:00 PM
From: IQBAL LATIF	Read Replies (2) \| Respond to of 50167

The little I can read this is nothing but a vote of confidence to US markets.. Greenspan Discusses Asian Crises By MARTIN CRUTSINGER AP Economics Writer WASHINGTON (AP) - The global economic turmoil of the past two years might well have been avoided if crisis countries had developed strong bond markets to back up their banking systems, Federal Reserve Chairman Alan Greenspan said today. Searching for lessons from the currency crisis that leveled a number of economies beginning in 1997, Greenspan said the problems could have been dealt with more easily if businesses in affected countries had been able to raise money in capital markets after banking systems got into trouble. ``Had a functioning capital market existed, along with all the necessary financial infrastructure, the outcome might have been far more benign,' Greenspan said in remarks to a Fed-sponsored banking conference in Atlanta. The global financial crisis, which began in Thailand in 1997, leveled a number of other Asian countries as well as destabilizing the economies of Russia and several Latin American countries. Greenspan said global turmoil in the fall of 1998 did not derail the U.S. economy largely because American banks were able to step in and replace the bond market as a source of business loans after bond investors became fearful of buying any new debt issues following Russia's default. ``What we perceived in the United States in 1998 may reflect an important general principle: Multiple alternatives to transform an economy's savings into capital investments act as backup facilities,' Greenspan said. He said this could be one of the major lessons of the Asian crises: Economies are better able to withstand financial turmoil if they have a bond market that can provide lending when banks get in trouble and capital markets freeze up. He said that it was understandable that Asian economies, which had enjoyed three decades of phenomenally solid growth, would not see a need for a backup to their banking systems. ``The lack of a spare tire is of no concern if you do not get a flat,' Greenspan said. ``East Asia had no spare tires.' Greenspan, who covered many of the same areas today that he had in a speech last month to the World Bank and the IMF, said that America's mild recession in 1990-91 - the last U.S. downturn - could have been far more severe if bond investors had not been willing to step in to provide capital to businesses after bank lending dried up. He also said that Japan's prolonged economic troubles in this decade, reflect the fact that its bond markets have not been able to replace banks and keep capital flowing to businesses. ``Diversity within the financial sector provides insurance against a financial problem turning into economy-wide distress,' Greenspan said.