Home / Knowledge / News / "Financial crisis wake-up call"- Pascal Lamy, WTO
"Financial crisis wake-up call"- Pascal Lamy, WTO
13
Nov '08
Mr Pascal Lamy, DG, WTO
Mr Pascal Lamy, DG, WTO
Speech of Mr Pascal Lamy, Director-General of World Trade Organisation delivered to WTO ambassadors on 12 November, 2008

"The world is experiencing one of the most severe financial crises in modern history, with its epicentre in the United States and spill-over effects for major financial centres around the world. The correction of asset values is so strong that it has systemic implications on the soundness and safety of the entire international financial system.

Governments, central banks and regulatory authorities are acting on several fronts, injecting liquidity, re-capitalizing and restructuring financial institutions, and stopping risky behaviour that could further precipitate markets into depression.

Beyond this, the realization that an over-grown financial system had developed “bubbles”, based on poor assessment of risk and questionable use of ample flows of liquidity, has been raising questions in countries and internationally about the need to provide a stronger skeleton to the international financial architecture.

The financial crisis that we experience is a wake-up call indicating that the world economy cannot grow above the limits of its real production, and that feeding it by debt and liquidity may only provoke severe corrections.

This is not the first shock witnessed by the multilateral trading system. Despite its young age, the WTO has already faced previous episodes of financial crises, and has shown resilience. By keeping markets open during periods of financial and external payments crisis, the multilateral trading system has shown that it can give a chance to crisis-stricken countries to recover through trade.

However, we have also learned from these periods that, to do so, access to trade finance at affordable rates must be maintained in such critical times to ensure that international trade can continue to play its shock-absorbing role.

After the Asian crisis and in other cases of an abrupt interruption of trade credit lines by international banks to some crisis-stricken countries, the WTO, in partnership with the IMF and the World Bank, formed an informal group of experts from regional development banks, credit insurance agencies and international banks involved in providing trade finance facilities of one kind or another.

Under the banner of “coherence”, the aim was to seek options to deal with the scarcity of trade finance during periods of crisis and what appeared to be a trend to withdraw from smaller developing countries' markets. Since then, the WTO has hosted meetings periodically to discuss how to address these shortcomings, the last one in April 2008. We sensed rising costs and liquidity shortages which were already hitting trade finance for particular developing countries and least-developed countries.

The meeting that I chaired this morning, with representatives of private banks, international financial institutions and exportcredit agencies, has confirmed that the market for trade finance has severely deteriorated over the last six months, and particularly since September. Two key problems were identified.


Must ReadView All

Courtesy: ITMA 2015

Textiles | On 21st Jun 2018

Italy to host textile machinery fair ITMA in 2023

ITMA, the trendsetting textile and garment technology platform, will...

Courtesy: Connor Group

Textiles | On 21st Jun 2018

Protectionism top threat to textile sourcing: William Connor

Protectionism is the biggest political factor and threat affecting...

NRF urges US Congress to step in, stop trade war

Apparel/Garments | On 21st Jun 2018

NRF urges US Congress to step in, stop trade war

The National Retail Federation (NRF) recently urged the US Congress...

Interviews View All

Mukesh Agarwal & Rajesh Agarwal
Madhuram Fincap Pvt Ltd

Increasing prices and lack of demand main issues facing industry

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Headhonchos
Indian fashion industry

Organic the first choice of any environment-conscious person

Harsh Shah

Fynd is the central online shopping destination for fashion, offering...

Urmil Arya

Sushila International, a well established textile organisation established ...

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Amiben Shroff
Shrujan

From its modest beginning in the late 1960s, Shrujan has grown into a...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


June 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search