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To: Investor-ex! who wrote (23943)	12/7/1998 5:39:00 PM
From: Alex	Respond to of 116924

BOE'S KING: JAPAN BANKING SYSTEM STILL 'SHROUDED' IN MYSTERY By Tom Borroughes LONDON (MktNews) - Bank of England's Deputy Governor Mervyn King on Monday criticised Japan's banking system for not being sufficiently transparent, in a speech pondering the lessons to be learned from recent market crises. Speaking at a conference alongside Financier George Soros, King said the lack of transparency in Japan's financial system remains a key problem. "Even today, the state of the Japanese financial system remains shrouded in uncertainty." "Transparency must be improved in the private sector, in government and also in international financial institutions," King said. King also said the crises demonstrated the dangers of excessive reliance on inter-bank finance and said policymakers should encourage greater use of equity-based finance to avoid volatility inherent in short-term bank credit. He warned the conference the world cannot afford a repetition of such financial crises, particularly when they follow each other quickly in succession. King disagreed with the contention of Soros that the developed economies, which have pursued conventional economic policies, have emerged largely unscathed, if not having benefited, from the recent crises. "Unlike George, I do not believe that it (the West) has benefited from this crisis. Financial crises have been more frequent in countries which have pursued sound policies than in those countries that have not followed what might be called the Washington consensus," King said. He cited as examples Mexico and South Korea. Turning to Soros himself, earlier in the conference the well-known financier claimed that his suggestion of international credit insurance has been well received by the G-7 industrialised nations and also urged tighter international regulations. Soros said the recent financial turbulence had many causes, such as corruption, misaligned exchange rates, and trade imbalances, but also believed the trouble demonstrated a "systemic failure" of the global financial system. Soros asked rhetorically, "The international financial system itself must also be at fault. How else could it have been so badly shaken by the Russian default and the near collapse of Long-Term Capital Management?" 15:57 EST 12/07 © 1998 Market News Service, Inc. economeister.com