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To: re3 who wrote (85533)	2/15/2001 9:25:15 AM
From: Efthymios H. Zacharias	Respond to of 86076

It could be something. ....................................................... [B] UK Press: O'Neill to take hands-off stance to world economy Updated Thu 2/14/2001 22:41 EST By BridgeNews Singapore--Feb. 15--U.S. Treasury Secretary Paul O'Neill has signaled that the Bush administration would take a strongly skeptical view of official intervention in global markets to help stabilize the world economy, the Financial Times reported Thursday. In an interview with the FT on the eve of leaving for his first G7 meeting, the Treasury Secretary also rejected the notion that crises were an inevitable feature of capitalism, needing an official backstop to help resolve them. * * * According to the FT, O'Neill said that the failure to stop crises from developing was a failure to let markets operate freely. "It doesn't have anything to do with the failure of capitalism. It's to do with an absence of capitalism," he said. On the subject of intervention in the FX markets, O'Neill was careful not to rule out U.S. involvement either in coordinated intervention, or leadership in International Monetary Fund operations to help countries in financial difficulties. And he suggested more attention should be given to using free markets to prevent crises from developing. "Why do we have to intervene? Especially why do we have to intervene on a crisis basis? [Crises] are great media fodder but they're not real hot for anybody else," O'Neill added. The FT said O'Neill strongly indicated he shared concerns about what economists dub "moral hazard", the process by which the certainty of a bailout in the event of a crisis prompts reckless investor behavior. "When you don't have risk associated with investment, you don't really have capitalism. You have a kind of socialised lottery system," O'Neill said. The U.S. Treasury Secretary meanwhile likened the IMF and the World Bank to a "fire company" that should never have to respond to emergencies. "In an ideal world, the fire company never leaves the firehouse...hopefully they learn how to play chess really well." The above comments were made in relation to his view that free markets should be able to anticipate crises before they even occurred. The FT said O'Neill sounded a note of skepticism on the value of G7 discussions, saying "I'm interested in watching the process and finding out what others think the value is that's created by this process". The Treasury Secretary, however, praised the underlying goal of the G7 group, which is used as vehicle for the world's major policymakers to get together. End Copyright 2001 Bridge Information Systems Inc. All rights reserved.