Banks must come clean about sub-prime exposure
by Kay Murchie
The G7 finance ministers and central bank governors are to gather in Washington this week amid requests for a global response to the credit squeeze. During the summit, Chancellor Alistair Darling is to push a UK scheme for a world ‘early warning system’ for financial crises.
Mr Darling wrote to fellow G7 ministers saying banks must be pressured to write-down mortgage-linked assets as soon as possible.
He believes that without clarity about the extent of sub-prime related losses, the interbank lending markets will remain frozen, resulting in a prolonged credit crisis.
The Chancellor also said an overhauled International Monetary Fund should sit at the heart of this new system, in league with the Basel-based Financial Stability Forum. However, other countries are less convinced that the IMF has a credible role to play.
The meeting will take place on Friday.
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