“What’s in YOUR wallet?”
Source: American Shipper News Wire (Date Posted: 11/13/2008)
“Pascal Lamy, director-general of the World Trade Organization, said Wednesday after a meeting with representatives of private banks, international financial institutions and export credit agencies, that ‘the market has severely deteriorated over the last six months, and particularly since September.’
“‘The world economy is slowing and we are seeing trade decrease. If trade finance is not tackled, we run the risk of further exacerbating this downward spiral,’ he said.”
“‘Two key problems were identified. One is a shortage of liquidity to finance trade credits. The second is a general reassessment of risks caused as much by the financial crisis as by the slowing down of the world economy. These markets are being felt most acutely by traders and banks in the emerging market economies,’ Lamy said. ‘The view expressed this morning (Wednesday) by the trade finance practitioners is that the situation is likely to deteriorate further in the months to come’…
“He said the market estimates the liquidity gap in trade finance at about $ 25 billion – ‘a sizable sum, but not enormous relative to the amounts that central banks have found it necessary to inject into financial and banking markets in the past couple of months’. Private banks believe this gap could be filled through increased partnerships with international financial institutions and export credit agencies if they are supported by governments, he said.
“Lamy also called for improvements in information sharing, risk assessment techniques, and data collection on trade finance.”
[Note the subtle thread running through his address. “One is a shortage of liquidity to finance trade credits”, he said … which actually means, “Hand over the money so credit can continue to be extended … or else.” And “The second is a general reassessment of risks caused as much by the financial crisis as by the slowing down of the world economy”, he said … which actually means, “Make sure the handouts are ‘supported by governments’”. Not a word about creating jobs, however, because the connection between the global economic downturn and the unemployment crisis in the U.S. hasn’t even crossed his mind.]
Maybe Mr. Lamy has an excuse for his ignorance, but that can hardly be said for the several hundred economists and advisors who accompanied the heads of state at last week’s G-20 summit meeting in Washington. Not a single one of them came up with a logical thought. According to a November 16th Bloomberg story, all these so-called leaders were able to come up with was an agreement to take further steps to shore up a global economy “sliding into recession”, along with some meaningless regulatory proposals to prevent a “recurrence” of the financial crisis.
As a mark of its futility, the group pledged not to erect new trade barriers, guaranteed more resources for the International Monetary Fund, if needed … and promised to meet again in May!!