Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: The Barracuda™ who wrote (33134)	5/4/1999 2:14:00 PM
From: Alex	Read Replies (2) \| Respond to of 116798

Fed's Guynn: Crisis Shows Risks of Relying on Foreign Capital <Picture> By Edward Kean, Bridge News Washington-May 4--The recent global financial crisis shows the risks of governments relying on foreign capital to promote economic growth, and countries with less "transparent" policies will have a harder time attracting foreign capital, Federal Reserve Bank of Atlanta President Jack Guynn said today. In remarks for delivery to a conference in Atlanta on corruption in Latin America, Guynn said a lack of openness in government operations aggravated problems in various countries hit by the recent global financial trauma. He referred specifically to developments in Thailand, Indonesia and Japan, the latter relating to banking supervision. Guynn said there are "two inescapable conclusions" from the recent global financial crisis. First, "countries that seek to promote economic growth by importing foreign capital will not be able to avoid the discipline of the market," he said. Second, "the less transparent polices are, the less capital will be attract and the higher its cost will be," Guynn said. Guynn, who is not a current voter on the Federal Open Market Committee, made no comments on the state of the US economy. He did reiterate the Fed's mission includes maintaining economic growth, full employment and low inflation at "sustainable levels." Much of his prepared remarks focused on the benefits of openness in governments. He recounted problems relating to a lack of openness during the recent global financial crisis. These included the failure of the Thai government to fully disclose its reserve holdings. Once financial markets realized they had been "sold a lemon in Thailand," they re- assessed the information from much of the Asia and that contributed to the weakening of financial markets throughout the region, Guynn said. More transparency would have made it less likely that financial bubbles formed in the first place or would have mitigated the impact of the financial market reassessment of Asian economic conditions, he stressed. Guynn did not assess the current state of economic activity in East Asia. Analysts have said there are signs that economic activity is picking up in some parts of Asia, though Fed officials have said risks in the region remain. (c) Copyright 1999 FWN futuresource.com