FM reviews global financial meltdown with top economic experts

New Delhi, Oct 29 (PTI) Finance Minister P. Chidambaram
Wednesday met key regulators and policy makers to review the
impact of the global financial crisis on the country and
measures to tackle it.

The meeting, which took place at the North Block office
of the Finance Minister, was attended by top economists,
including Reserve Bank of India (R.B.I.) Governor D. Subbarao,
R.B.I. Deputy Governor Rakesh Mohan, plan panel Deputy
Chairman Montek Singh Ahluwalia and Securities and Exchange
Board of India (S.E.B.I.) Chairman C.B. Bhave.

Coming out of the meeting, former chief of P.M.'s
Economic Advisory Council C. Rangarajan said they deliberated
on the international financial crisis and its implications for
emerging economies.

The meeting, he said, also discussed the stance that
India may take at the Summit on 'Financial Market and the
World Economy' convened by the U.S. at Washington on November
15.

Among other things, the G20 Summit will discuss the
effects of the current crisis on emerging economies and
developed nations.

Besides, 13th Finance Commission Chairman Vijay Kelkar,
former R.B.I. Governor Bimal Jalan, Finance Secretary Arun
Ramanathan, Department of Economic Affairs Secretary Ashok
Chawla, and other officials were present at the meeting.

The global financial meltdown triggered by the sub-prime
mortgage crisis in the U.S. has already resulted in the
failure of 16 banks in the U.S. and rescue of several others
in Europe.

The ripple effects of this crisis are being felt in the
emerging economies, including India, which has been witnessing
a liquidity crunch, besides sharp erosion in value of stocks
at bourses.

To ease liquidity crisis, the RBI and the government
have initiated host of measures, including 250 basis points
cut in mandatory deposits that banks keep with central bank.

During this month, R.B.I. has pumped in Rs 1,85,000 crore
into the banking system.

At the same time, market regulator S.E.B.I. has allowed
promoters to increase their holding in their companies up to
75 percent through creeping acquisition route.

The measure is expected to boost the market sentiment
as promoters will be tempted to resort to creeping acquisition
given the current depressed prices of their shares.

Outgoing U.S. President George Bush has called a meeting
of G-20 to discuss the global financial crisis and work out a
joint strategy to deal with the emerging situation.

Besides, the U.S., the members of G20 includes India,
Australia, Brazil, Canada, China, France, Germany, Italy,
Japan, Russia, the U.K. and European Union.

In order to deal with the financial meltdown, the U.S.
has already come out with about USD 700-billion bailout
package but the efforts have failed to restore the investor
confidence as stock markets continued to move southward.