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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Roderick Ciferri who wrote (6807)	9/30/1998 3:30:00 AM
From: Zardoz	Read Replies (2) \| Respond to of 9980

{heard a RUMOUR that Japan credit has been downgraded today, can anyone confirm this?} World Bank: Asia Could Get Worse By HARRY DUNPHY Associated Press Writer WASHINGTON (AP) _ The World Bank has a bleak view of Asia's financial crisis: It is severe; it could get worse and global economic expansion may be threatened. Children in the region are dropping out of school, families are going hungry and teenage girls are being pushed into prostitution, the bank said in a new report on Asia issued Tuesday. ''One year after it began, the economic storm in East Asia is still gathering momentum,'' the report said. ''The crisis has spread to financial markets around the world and now poses risks to global expansion.'' As investors fear Asia's meltdown will spread to Latin America, the bank warned that the financial crisis has taken on ''systemic proportions'' in Thailand, Indonesia, South Korea and Malaysia with many banks and companies bankrupt or hovering on the brink. The report said Indonesia remains unstable. ''These events, left unchecked, threaten to engulf the whole of East Asia and could even imperil the otherwise robust expansion of the world economy,'' said the report, entitled ''East Asia_ the Road to Recovery. '' It was released on the first day of the annual meetings of the bank and the International Monetary Fund, which run through Oct. 8. The Asian financial crisis and dealing with ways to prevent such eruptions in the future are expected to dominate the agenda of these meetings, which bring together finance ministers and central bankers from 182 nations. Several nations have called on the United States to show leadership in reforming the international financial system to prevent massive flows of investor capital in and out of countries from producing more financial crises. The report suggests international financial institutions like the bank and the IMF may have done more harm than good when they tried to rescue Asian economies 14 months ago as the crisis began. ''Questions have arisen about early rescue packages led by multilateral institutions. Were they overly contradictory and did they inadvertently push economies deeper into recession?'' the report asked. Presenting the report, Jean Michel Severino, World Bank vice president for East Asia and the Pacific, said: ''The standard of living of a whole generation is in the balance.'' Severino said the bank was nearly tripling spending on projects aimed at helping the poor from $700 million to $2 billion in the current fiscal year. He said the bank was encouraged by President Clinton's call Sept. 14 for a substantial increase in this spending. The report said the most urgent task in the region is restoring conditions for robust economic growth but that job won't be easy. Richard Newfarmer, main author of the report, said three main factors will shape the recovery: the rate of expansion of the global economy; Japan's economic performance; and events in emerging markets. Japan, the world's second largest economy, has come under pressure from the United States and other G-7 countries to stimulate consumer-led growth to solve the $1 trillion bad debt problem in its banks. dailynews.yahoo.com

To: Roderick Ciferri who wrote (6807)	9/30/1998 6:37:00 PM
From: Tundra	Read Replies (1) \| Respond to of 9980

FYI Still No Plan for Japan Bank Reform .c The Associated Press TOKYO (Sept. 30) - The leader of Japan's main opposition group says disagreement within the ruling party is threatening to delay legislation aimed at fixing the nation's ailing banks. Prime Minister Keizo Obuchi's ruling Liberal Democratic Party has yet to submit its proposal for how to strengthen banks whose financial condition has become dangerously weak, Naoto Kan, leader of the Democratic Party, said Wednesday. ''There is still confusion and a lack of consensus within the LDP,'' Kan said. The legislation is controversial, even within the ruling party, because it would involve the use of public money to bail out private banks. The delay by the ruling party in putting together a proposal meant the bank crisis legislation may not pass Parliament's lower house until next week, Kan said. Meanwhile, Obuchi offered no indication of when his party would come up with its plan, saying only that the government wanted to draft and pass the legislation as soon as possible. Lawmakers are hoping to pass a series of bank bills aimed at cleaning up the debt-ridden financial system and, ultimately, at rescuing Japan from its most stubborn recession since World War II. Ruling and opposition parties have agreed on the basic outline of the plan but have yet to turn the agreement into law. While they wrangle over the details, there are signs Japan's financial crisis is worsening. The nation suffered the biggest corporate bankruptcy in its postwar history Monday when Japan Leasing Corp. announced it saw no way to escape from a crushing burden of bad debt. On Wednesday, Moody's Investors Service cut its rating for the creditworthiness of Nomura Securities Co., Japan's top brokerage and one of the world's largest. The move was the latest indication that international trust in Japan's financial companies was deteriorating. AP-NY-09-30-98 1147EDT