Week of April 10, 2011 thru April 16, 2011

World Bank Chief:'We're One Shock Away From Full Blown Crisis'

--Development Cmte Sounds Alarm on Impact of High,Volatile Food Prices

By Heather Scott

WASHINGTON (MNI) - As the world's top finance officials focused on
policing global imbalances and financial supervision, the World Bank
Saturday raised the alarm on rising food prices, warning that many
millions more could be pushed into poverty if prices rise further.

"We are one shock away from a full blown crisis," World Bank
President Robert Zoellick said of the rising food and fuel prices and
the impact on the least developed economies, warning of the

Germany's Schauble to IMFC: Growth Lets Germany Cut Budg Def

By Steven K. Beckner

WASHINGTON (MNI) - With its economy in a "broad-based upturn,"
Germany is moving forward with "ambitious" budget deficit cutting
measures, German Finance Minister Wolfgang Schauble told the
International Monetary Fund's policymaking body Saturday.

Schauble sounded less sure about the world economy than about his
own in remarks prepared for delivery to the IMF's International Monetary
and Financial Committee.

"Within the group of advanced economies, some still depend
largely on stimulus measures introduced during the crisis, while in

Mexico Fin Min:G20 Cld Exert Pressure to Correct Global Imbals

--No Doubt Mexico Does Not Have Any Imbalances
--Not Clear Capital Controls Working; Emrg Mkt FX Still Appreciating

By Heather Scott

WASHINGTON (MNI) - Mexico Finance Minister Ernesto Cordero said
Saturday the Group of 20 process to measure and identify imbalances in
economies of member nations will exert some pressure on governments to
change policies that could or have created spillover effects.

However, he said Mexico does not have any imbalances that would be
subject to G20 oversight.

IMF's Strauss-Kahn, Shanmugaratnam Warn of Infl,Int Rate Rise

By Steven K. Beckner

WASHINGTON (MNI) - Although most Federal Reserve officials have
continued to minimize U.S. inflation risks, the threat of inflationary
"overheating" was very much on the minds of the head of the
International Monetary Fund and the chairman of the IMF's policymaking
body Saturday.

Inflation poses a growing threat in emerging markets and parts of
the industrialized world and could spread if proper care isn't taken,
according to IMF Managing Director Strauss-Kahn and Tharman
Shanmugaratnam, the Singapore finance minister who chaired the IMF's

IMFC Communique: Need 'Credible Actions' to Deal w/Fin Risks

WASHINGTON (MNI) - The governing body of the International Monetary
Fund said Saturday that "credible actions" are needed to address
remaining risks to the global financial sector. The text of the
statement follows:

Communiqu of the Twenty-Third Meeting of the International
Monetary and Financial Committee of the Board of Governors of the
International Monetary Fund

Chaired by Mr. Tharman Shanmugaratnam, Minister for Finance of

We welcome Minister Tharman as our new Chairman. We thank Dr.

Brazil's Mantega: Emrg Mkts Can't Accept More FX Overshooting

--Blames 'Ultra-Expansionary Monetary Policies' for Capital Surge
--Fragility of Global Recovery Could Signal Return of Boom/Bust Cycle

By Heather Scott

WASHINGTON (MNI) - Brazil Finance Minister Guido Mantega said
economies facing a surge in capital inflows cannot accept further
overshooting of their currencies, and will not accept prescriptions on
how to implement capital controls to manage those flows.

Mantega has been less visible at the Spring meetings of the
International Monetary Fund but his official statement prepared for

Argentina Fin Min:Will Cont to Accelerate Growth,No Infl Fears

--Stats Agency Indec Reviewing IMF CPI Recommendations
--Working Towards Stronger Indec, Don't Expect New CPI This Year

By Heather Scott

WASHINGTON (MNI) - Argentina Finance Minister Armando Boudou Friday
said the government will continue to work to spur higher growth, fearing
unemployment more than inflation.

Speaking to reporters following the Group of 20 meeting, Boudou
said he was glad the group recognized the need to improve living
standards in the first paragraph of its communique.

G20 Seal 'Indicative G-Lines';Move Forward on Imbalances

--U.S. Treasury Under Secretary Brainard Calls It 'A Nice Step'

By Steven K. Beckner

WASHINGTON (MNI) - Group of 20 finance ministers and central
bankers took another step toward monitoring "imbalances" among the
world's leading trading nations, agreeing on a set of "indicative
guidelines" with which to measure those imbalances.

The G-20 policymakers, in a late Friday afternoon communique, also
agreed to strengthen coordination "to avoid disorderly movements and
persistent exchange rates misalignments."

U.S. Undersecretary of Treasury for International Affairs Lael

G20 Seal 'Indicative G-Lines';Move Forward on Imbalances -2-

--U.S. Treasury Under Secretary Brainard Calls It 'A Nice Step'

By Steven K. Beckner

She said there was "concrete agreement" on how to assess imbalances
and said it was "clear everybody is ready to move to the next
stage ... There was broad agreement on the goals and the path forward."

There was "an engaging and deeper conversation" about the problem
of imbalances and a greater recognition of "impediments to adjustment in
the system."

But when asked how the U.S. and China will actually move to reduce

US FDIC Bair Defends Risk Retention Against Criticism

--Retransmitting 15:21 ET Story, Adding 11th Graph 'Investors'

By Claudia Hirsch

NEW YORK (MNI) - Federal Deposit Insurance Corporation Chairman
Sheila Bair Friday defended the 5% risk retention rule recently proposed
by U.S. regulators which has already faced widespread criticism from

"Some have suggested that we have defined this QRM carve-out too
narrowly, which will result in the denial of reasonably-priced mortgage
credit to all but the most highly qualified borrowers," Bair said in a