ID :
26823
Mon, 10/27/2008 - 10:28
Auther :
Shortlink :
http://m.oananews.org//node/26823
The shortlink copeid
DEVELOPING NATION WARNED OF GLOBAL FINANCIAL EXPOSURE
New York, Oct 27 (ANTARA) - Developing countries, including Indonesia, were warned that they should tightly control the increase of their global financial exposure, or portfolio investment overseas, so that they would not be affected too much and become the worst victims when a global financial crisis occurred.
"The more globalized the financial exposure of a country, the worse impact it would likely suffer when a global financial crisis occurs," Nobel Laureate on economy in 2001, Joseph Stiglitz told a number of Asian and African journalists here on Sunday.
He said that the conventional policy of a number of countries in issuing state bonds, both domestic and international, to cover up their budget deficit was very risky for their fiscal condition owing to the present upward trend in the world's interest rates.
He said that the interest rates in the developing countries were now on the rise. The increase in foreign portfolio investments happened not only in the financial market but also in domestic banks, except there was a tight regulation such as the one now being imposed by India.
Stiglitz said developing domestic bank system was a wise policy, however, when the system ended up at the stock market, it would also face the risky impact.
So, the portfolio investment management is quite important, said the former economist of the International Monetary Fund (IMF).
"The more globalized the financial exposure of a country, the worse impact it would likely suffer when a global financial crisis occurs," Nobel Laureate on economy in 2001, Joseph Stiglitz told a number of Asian and African journalists here on Sunday.
He said that the conventional policy of a number of countries in issuing state bonds, both domestic and international, to cover up their budget deficit was very risky for their fiscal condition owing to the present upward trend in the world's interest rates.
He said that the interest rates in the developing countries were now on the rise. The increase in foreign portfolio investments happened not only in the financial market but also in domestic banks, except there was a tight regulation such as the one now being imposed by India.
Stiglitz said developing domestic bank system was a wise policy, however, when the system ended up at the stock market, it would also face the risky impact.
So, the portfolio investment management is quite important, said the former economist of the International Monetary Fund (IMF).
