Norway fears new global recession / News / The Foreigner

Norway fears new global recession. Norwegian banking authorities say they are worried about an economic relapse and have turned to the International Monetary Fund (IMF) for help. During last weekend’s IMF summit in Washington DC, Norges Bank Governor Svein Gjedrem asked the IMF to get more involved by using methods that would “serve both as crisis prevention and crisis resolution mechanisms” in global markets. His remarks came as a reaction to the financial policies that the US and the EU are using to stabilize their economies and support a slight growth.

svein, gjedrem, governor, norges, bank, sigbjoern, johnsen, finance, minister, imf, washington, eu, norway



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Norway fears new global recession

Published on Monday, 11th October, 2010 at 13:57 under the news category, by Ramona Tancau.
Last Updated on 11th October 2010 at 14:13.

Norwegian banking authorities say they are worried about an economic relapse and have turned to the International Monetary Fund (IMF) for help.

IMF meeting in Washington
IMF meeting in Washington
Photo: International Monetary Fund/Flickr


Protectionism

During last weekend’s IMF summit in Washington DC, Norges Bank Governor Svein Gjedrem asked the IMF to get more involved by using methods that would “serve both as crisis prevention and crisis resolution mechanisms” in global markets.

His remarks came as a reaction to the financial policies that the US and the EU are using to stabilize their economies and support a slight growth.

Gjedrem highlighted that the US Federal Reserve, the Bank of England and the European Central Bank have employed “unconventional monetary policy,” buying long-term government or corporate bonds and that their effects are uncertain.

As the representative of the Nordic and Baltic states, he praised the intervention of the G20 countries to support markets during the crisis, but pointed out that that it is the IMF who should multilaterally represent world countries.

“It is a way to run monetary policy that has not been done for many decades. One does not have experience with these type of instruments and it is uncertain how effective they are,” he told Dagens Næringsliv (DN).

According to Aftenposten, Gjedrem said that such practices might cost the US and Europe up to seven years of lean recovery.

Dependency

Finance Minister Sigbjørn Johnsen was also present at the Summit, accusing some countries of being more preoccupied with themselves, and criticising their protectionism for having fuelled a sharp increase in interest rates.

He was not concerned about its effect on Norway, because he believes the country “is very well adapted to the economic situation.”

However, Johnsen admitted the Norwegian economy’s performance is intertwined with those of its trading partners.

“We are very dependent on the success of those around us. Although we now see that growth is picking up globally, it is a very fragile growth. Norway is dependent on a success now, not least in relation to our closest European neighbours," he told DN.

Johnsen said he was worried as to what might happen if this failed.

“In 2008, during the financial crisis, we learned the importance of cooperation among the EU countries and the IMF. There will be a major setback if the cooperation crumbles and the world returns to [its] old sins,” he told Aftenposten.




Published on Monday, 11th October, 2010 at 13:57 under the news category, by Ramona Tancau.
Last updated on 11th October 2010 at 14:13.

This post has the following tags: svein, gjedrem, governor, norges, bank, sigbjoern, johnsen, finance, minister, imf, washington, eu, norway.





  
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