Chidambaram asks US, Europe to 'set their house in order'

Washington, Nov 15 (PTI) Indian Finance Minister P.
Chidambaram has asked the U.S. and Europe to "set their house
in order" to reverse the impact of the financial crisis on
economies worldwide and help capital to flow back to
developing nations.


"If they (U.S. and Europe) set their house in order,
surely capital will flow back to developing countries...credit
will flow back and things will be much better", he said in an
interview to a private television channel ahead of the G-20
Summit here.



The Minister further said, "What India wants is that
the country where this crisis originated...the U.S. and some
countries in Europe must do all that is necessary to reverse
the impact of the crisis of the global economy, especially the
economies of the developing countries".


Asked about the ways to encourage capital flow back to
developing countries, Chidambaram said, "We do not have to do
anything more. What we have had in place was enough to attract
capital in the last three years. What is happening now is
because of what is happening in their countries."


Chidambaram said unfreezing of credit in the west was
necessary to ensure the flow of funds to developing countries.

On the issue of what more India could do to neutralise
the impact of the global crisis at home, he said, "We don't
have to do anything more. What we had in place was enough to
attract capital in the last three years ... what is happening
now is because what is happening in their countries."

The Minister said, "If they set their house in order,
capital will find its way to attractive destinations where
returns are adequate and attractive ... India is such a
destination."


On his message to U.S. Treasury Secretary Henry Paulson,
Chidambaram said, "I will tell him what we have been telling
him at the I.M.F. for the last 4-5 years ... get your
imbalances right. You cannot live with such huge imbalances in
your economy."

The U.S. government, he added, needs to encourage its
people to save more, in addition to improving its financial
institutions.

"Regulate your financial institutions, especially
systemically important institutions, which have a global
footprint ... regulate them better," he said.

The Indian Finance Minister also asked the U.S.
government to put in place capital adequacy norms and risk
assessment procedures to improve the health of the financial
system.

He said things would improve "if they do what sound
and sensible bankers do, and I am sure they have the capacity
to do it ... they have done in the past. They seem to have
relaxed their visuals in the past 10-15 years."

Prime Minister Manmohan Singh is leading the Indian
delegation to the G-20. The delegation includes, apart from
Chidambaram, Planning Commission Deputy Chairman Montek
Singh Ahluwalia.