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To: djane who wrote (8043)	9/15/1998 2:01:00 PM
From: djane	Respond to of 22640

G7 rallies to right world financial crisis Top industrial nations vow to do whatever it takes to implement long-term solutions By Knut Engelmann Reuters, 09/15/98 ASHINGTON - Top industrial nations rallied behind the US administration yesterday in a carefully staged show of support for the world economy, vowing to do whatever it takes to pull it back from the brink of disaster. In a speech in New York, President Clinton called for finance ministers and central bank chiefs from the Group of Seven nations as well as emerging-market countries to meet in Washington within a month to craft long-term solutions to the worldwide financial crisis. Barely an hour later, the G7 released a statement in which it warned the risk of a global slowdown had increased because of the rapid spread of financial turmoil. ''There is a general truth that the magnitude of the deterioration in the external environment is much greater than had been previously anticipated,'' a US administration official told reporters later in the day. Both Clinton's speech and the G7 statement recalled in parts a speech by Federal Reserve chairman Alan Greenspan 10 days ago, in which he signaled that the Fed might consider a cut in key interest rates. The G7 said ''inflation is low and falling in many parts of the world'' and added that members of the group had ''emphasized their commitment to preserve or create conditions for sustainable domestic growth and financial stability in their own economies.'' The communique, drawn up during a series of conference calls this weekend between top G7 officials, in close coordination with the Fed and Greenspan himself, also ''noted the importance of close cooperation'' among major industrial nations. The US official declined to say whether those words were meant to ready financial markets for the possibility of a concerted cut in interest rates across major economies. ''I'm not going to tell you what this may or may not mean for monetary policy anywhere,'' he said. He added: ''You can read this as a general acknowledgment that there's been a significant change in the external environment generally.'' US Treasury Secretary Robert Rubin, briefing reporters in New York, was adamant in his denials when asked whether Clinton had tried to send Greenspan a signal that it was time to cut interest rates now. ''The answer to that is absolutely not,'' he said, adding that Clinton strongly believed in the Fed's independence. Clinton's speech was described as the culmination of the administration's efforts to focus the nation's and the world's attention on the mounting risk of serious damage to the global economy unless something is done urgently. But Washington's recipe for dealing with the crisis had an oddly familiar sound to it. Clinton's call for a major meeting on the crisis put the spotlight back on a little-known forum of developed and developing economies, the Group of 22, set up earlier this year to design ways of strengthening the world financial system. G22 was not supposed to outlive that objective. But now, with much of the world facing a financial meltdown, Washington wants to revive the forum. Rubin said Washington's aim was to ''extend the reach of the G22 into a set of broader issues.'' The group is expected to meet during a gathering of officials from the International Monetary Fund's 182 member nations in Washington from Sept. 29 to Oct. 8. The G22 contains the G7 - the United States, Japan, Germany, the United Kingdom, France, Italy, and Canada - plus Argentina, Australia, Brazil, China, Hong Kong, India, Indonesia, South Korea, Malaysia, Mexico, Poland, Russia, Singapore, South Africa, and Thailand. This story ran on page D03 of the Boston Globe on 09/15/98. c Copyright 1998 Globe Newspaper Company.