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To: Edmund Lee who wrote (22158)	10/22/1998 7:35:00 PM
From: lorne	Respond to of 116764

Wall St. Blows Nomura Loss To $3.7 Bn afr.com.au

To: Edmund Lee who wrote (22158)	10/22/1998 8:35:00 PM
From: goldsnow	Respond to of 116764

Howard confronts global crisis By Geoffrey Barker The Prime Minister, Mr John Howard, said last night that the global financial crisis had had a "colossal" impact on the Asian region and warned that Australia faced unprecedented instability in financial markets. "The impact of the financial crisis on the region has been huge, in some cases devastating," he said in a speech to the 10th International Conference of Banking Supervisors in Sydney. "It is crucial that we reach practical conclusions as soon as possible." Mr Howard laid out an ambitious and urgent agenda which he wants to present at next month's APEC summit meeting in Kuala Lumpur to ensure the region's economies and markets remain open. "We must focus on what can be done now to ensure that growth resumes and to avoid a major credit crunch," he said. His gloomy assessment is in sharp contrast to the Government's pre-election rhetoric about Australia's "fireproofed" economy. Mr Howard said the regional benefits of economic growth were being threatened because of a massive increase in unemployment and that families faced great hardship with food shortages and malnutrition. The internal political pressures created by such developments were immense, and "relationships between countries are tested". He announced the first meeting of a new task force on international financial issues would be held in Sydney today, saying he would attend the meeting, to be chaired by the Treasurer, Mr Peter Costello. Members of the task force include corporate leaders such as the managing director of the Commonwealth Bank, Mr David Murray, and the chief executive of AMP, Mr George Trumbull, and Treasury Secretary Mr Ted Evans and Reserve Bank Governor Mr Ian Macfarlane. Mr Howard said the APEC summit meeting should also seek to improve the transparency and accountability of government and corporate decision-making, and back proposals for reform of international financial architecture. The focus of APEC leaders "must be to get back onto the path of sustained growth as soon as possible". He warned APEC countries against revived fears that globalisation cost jobs and diminished national sovereignty. "APEC must stand against that view. Open markets provide the opportunity for economic growth and the enormous benefits from it," he said. In an indirect swipe at Malaysia's new capital controls, and Japan's reluctance to agree to fast-tracking new APEC trade liberalisation, Mr Howard said: "The worst possible response to the crisis would be to put up the shutters. That would result in competition to raise tariffs and barriers within the region and outside. "We saw the consequences of this sort of policy in the Great Depression of the 1930s." Mr Howard said confidence had to be rebuilt in Japan's economy among its own people and the rest of the world. And, he said, he continued to be astonished by the lack of comprehension of the scale of the impact of the crisis on Indonesia. The Kuala Lumpur summit "must recommit itself" to trade liberalisation goals. "I would like to see a concrete demonstration of that commitment by agreement to move ahead with early liberalisation in the full range of sectors agreed in Vancouver last year." Mr Howard said present regional problems could be ascribed partly to "a weak capacity to manage international capital flows and to the vulnerability of companies and governments to special interests and political cronyism". "There is no point in denying this," he said. "Reforms are needed to regain international confidence." The Prime Minister said that in Kuala Lumpur he would announce a package of bilateral measures to fill "substantial gaps" in economic governance in regional countries. He strongly backed President Clinton's call for urgent action to reform the international financial system which, he said, "had failed us". Mr Howard said measures needed to be developed for better-targeted disclosure requirements, better crisis management and to enable the IMF to provide "speedy and substantial support" to appropriately qualified countries caught in international contagion. afr.com.au