23 September 2008

The following statement has just been received by the WARC News Desk ...

OECD – Paris, 23 September 2008
Statement by the Secretary-General of the OECD, Mr. Angel Gurría,on the Financial Crisis and its Aftermath

1.      We welcome and support the adoption of the systemic rescue plan announced by the US Government on September 19 - 20, which will contribute to re-establish the normal operation of financial markets and preserve employment and economic activity. The plan seeks to provide the US Treasury with authority to issue up to US$ 700 billion of Treasury securities to finance the purchase of troubled mortgage-related assets from financial institutions that operate in the US. Announcement of the plan has already triggered a partial return to normality in US and world financial markets. Such a recovery should continue as the plan's operational, fiscal, and legal details are worked out in ongoing negotiations between the US Government and Congress and are enacted as federal law.

2.      By putting an end to the deleveraging of financial institutions – which was occurring at alarming speed through capital losses and credit contraction – the systemic rescue plan contributes to stabilize the US and world economies.

3.      This action will create the conditions for the much needed recapitalization of financial institutions, as they are able to shed troubled mortgage-based assets, raise new capital, regain the trust of counter-parties and thus re-establish “liquid” conditions in bank lending.

4.      The OECD will continue to work closely with governments, central banks, and international institutions in proposing and supporting implementation of regulatory and supervisory reforms of financial and capital markets that address the main regulatory and market failures that have emerged during this crisis. This task is at the heart of the work of the OECD: to foster stronger market economies, in close collaboration with its Member governments, thereby contributing to a better world economy.

Data sourced from OECD; additional content by WARC staff