Week of April 22, 2012 thru April 28, 2012
--Updating Story Published 18:44 ET Sat; Carstens Q&A Comments
WASHINGTON (MNI) - Mexican Central Bank Governor Agustin Carstens Saturday warned governments against a "slippery slope" of using accomodative monetary policy to postpone critical fiscal decisions.
Carstens said there is "not much" monetary policy can do except create a "window of opportunity" for governments, but he warned governments could wind up "worse off" if they do not take advantage.
Monetary accomodation "is a very slippery road," he said. "If the market believes you are using it to postpone decisions ...
--Low Income Countries Have Less Fiscal Space, Less Mon Pol Flexibility
--IMF's Lagarde: Risk Of External Shock To Low Income Countries
WASHINGTON (MNI) - The path ahead for the economies of low income nations will be "tricky," as they deal with the spillover effects from the crisis in the Eurozone, outgoing World Bank President Robert Zoellick said Saturday.
Speaking alongside him at the press conference following the meeting of the IMF and World Bank's Development Committee, IMF Managing Director Christine Lagarde warned that low-income countries have "less room for maneuver" should conditions in the global economy take a turn for the worse.
WASHINGTON (MNI) - The Eurozone must address banking sector problems in a pan-European way, European Central Bank Vice-President Vitor Constancio said Saturday.
"We need to address in a pan-European way the problem if the banking sector in Europe," Constancio said during a conference organized by the Bank of France.
The Eurozone needs cross boarder institutions, cross-boarder resolution funds and a European supervisors for big baning groups, Constancio said.
Constancio also called on Eurozone governments to implement all the commitments made over recent months "because that will be vital to over come the crisis."
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WASHINGTON (MNI) - Mexican Central Bank Governor Agustin Carstens Saturday said contagion makes the Eurozone's sovereign debt crisis "far more complex" than those of individual countries or the many debt struggles of Latin American nations in the past.
WASHINGTON (MNI) - Monetary policy will likely remain unconventional for some time but there should be no doubt at all action is being geared towards price stability, European Central Bank Governing Council member Christian Noyer said Saturday.
"Monetary policy will likely for some time rely on a diversity of instruments," Noyer said during a panel discussion organized by the Bank of France, which he heads, at the IMF-World Bank spring meetings.
Noyer said that in this "complex situation" it is essential that there is a "clarity on the objectives" of central bank action. "There should be no ambiguity about the reason why they have been doing so and there should be no doubt about their commitment to price stability, he said.
WASHINGTON (MNI) - Without sustainable fiscal developments, a central bank cannot properly work, Bank of Japan Governor Masaaki Shirakawa said Saturday.
Speaking at a panel discussion at the IMF, Shirakawa said, "Fiscal sustainability itself is an important precondition for the proper functioning of a central bank."
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--Jordan: Clear that EFSF/ESM 'First Line of Defence,' Not Imf Funds
WASHINGTON (MNI) - Swiss National Bank President Thomas Jordan Saturday reaffirmed the central bank is prepared to engage in "unlimited" currency interventions to defend its minimum exchange rate target of 1.20 SFR per euro in "all circumstances."
"Our monetary policy is very clear," Jordan said in Washington on the sidelines of the International Monetary Fund spring meetings. "The minimum exchange rate will be implemented under all circumstances."
"We have always said that we are prepared to use our balance sheet without restraint. This means unlimited currency interventions to achieve that.
--'Very Important Nuance' in Communique Relates to Infl Expectations
WASHINGTON (MNI) - Advanced and emerging economies have agreed that the easy monetary policy of the U.S. and developed Europe can remain accommodative only so long as inflation expectations remain firmly anchored, the chair of the IMF's steering committee told reporters Saturday.
The head of the International Monetary Fund and the chairman of its guiding committee described many European states -- now the beneficiaries of contributions from often less advanced, less prosperous nations -- taking "courageous" and vastly unpopular steps to put their problems behind them with everyone else's support.
--Obviously Have Market Pressures to Continue Reforms
--No Margin on Fiscal Policy, Only Option to Cut Deficit
WASHINGTON (MNI) - The government in Madrid will within days announce further steps in its economic and fiscal consolidation plan, Spain Economy Minister Luis de Guindos said Saturday.
Speaking at the conclusion of the International Monetary Fund's Spring meeting -- which included approval for a $430 billion increase in the global firewall -- de Guindos stressed that Spain has very little fiscal margin and the "only option" is to cut its deficit.
Asked at a briefing to provide specifics on the next steps in the reform plan, de Guindos promised the will be announce "in days."
He said the before the end of the
WASHINGTON (MNI) - The world's top economic policymakers called for continued "accommodative" monetary policies and warned against "excessively contractionary fiscal policies" Saturday at the spring meetings of the International Monetary Fund and World Bank.
The IMF's policymaking International Monetary and Financial Committee, a group of finance ministers and central bank governors representing 188 IMF member nations, remained very cautious about the global economic outlook in a communique.