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DOHA BANK LIVE UPDATE ON GLOBAL FINANCIAL STABILITY REPORT OCTOBER 2008 OF THE IMF
The Global Financial Stability Report (GFSR) October 2008 was briefed to the press by Mr. Jaime Caruana, Counsellor and Director International Capital Markets Department with his team in International Monertary Fund (IMF), on the 7th October 2008 at the IMF Headquarters, Washington D.C., USA, in the sidelines of 2008 Annual IMF-World Bank meet. The semi-annual GFSR replaced the earlier annual International Capital Markets Report and the quarterly Emerging Market Financing.
On talking to our reporter from USA, Mr. R. Seetharaman, Chief Executive Officer Doha Bank said 'The current report, placed today, not only enables the global financial community to understand and judge the performance of the global financial markets but also helps us to gauge the measures for the emerging market financing in a global context. The report placed by Mr. Jaime Caruana and his team has focused succinctly on the scenario existing in the global financial markets, adequately highlighting therein the issues of financial imbalances and structural imbalances that pose a risk to financial market stability and the sustained market accessibility by the emerging market borrowers. Further, certain relevant contemporary issues were also highlighted'.
'The report has assessed the risks that are affecting the current global financial stability in terms of the ongoing deterioration of the credit, highlight on the credit crunch; the losses estimated on account of the sub-prime crisis and the confidence placed on financial institutions by the public at large. The report has also adequately analyzed issues on the valuation and disclosure of the complex hybrid instruments, that lead significantly to the current financial crisis, to prevent such crisis in future and to restore the investors confidence back' Mr. Seetharaman said.
Mr. Seetharaman further said 'Few highlights that were very important for global financial institutions like us were the effect of aforesaid risk assessment by the IMF over the estimates projected on the global economy performance in the coming years and the projected cascading effect of the ongoing financial crisis in the western developed economies over the rest of the world. We cannot discount the fact that there will be no cascading effect because we have seen negative year-to-date growth experienced by stock markets in India, China and Japan ranged between 34% and 59% while relatively GCC stock markets experienced lesser negative growth ranging between 7% and 45% only, owing to stronger fundamentals operating in the GCC region'.
'Nature of the market and funding liquidity risks highlighted in the report clearly enables us to gauge role to be played by the central banks and the senior bankers during these periods of market and funding illiquidity' he said.
In his concluding remarks, Mr. Seetharaman said 'The report seeks to bring forth the consistency approach required to be adopted in the current period of financial crisis among the global financial community and is indeed has a very positive outlook to bring an end to the ongoing crisis'.
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