By Jack Duffy
WASHINGTON (MNI) – Mario Draghi, the president-designate of the
European Central Bank, drew a fairly bleak assessment of the global
economy at the IMF/World Bank meetings on Saturday.
In a speech, Draghi said that, “We are in a less positive mood
than we were in April. The expectations we had then did not materialize
and macroeconomic conditions have worsened worldwide.”
Draghi, who will become president of the ECB on Nov. 1, noted that
growth in the United States remains well below potential, Japan’s timid
recovery was derailed by the earthquake and tsunami in March, while in
Europe growth rates are falling amid the soverign debt crisis.
In some emerging market countries, Draghi said the danger of
overheating economies remains high, but raising interest rates carries
the danger of attracting more volatile capital inflows. In other
emerging economies, growth rates are being revised downwards, he said.
“The toll that developing economies are paying for the weakness of
the advanced ones is a reminder that ‘decoupling’ is a myth,” Draghi
said, referring to the debate about whether emerging economies could
continue to grow even as advanced economies slowed.
In an earlier statement to the meetings here, Draghi called on
financial institutions to strengthen their balance sheets in order to
withstand possible shocks from the sovereign debt crisis.
“The financial industry must continue to repair and strengthen
balance sheets to rebuild resilience to shocks,” he said.
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: M$$EC$,M$C$$$,M$U$$$,MN$FX$,MT$$$$,MI$$$$,M$J$$$,M$X$$$,M$A$$$,M$Q$$$]
