By Raphael Minder in Hong Kong and Alan Beattie in Washington Published: March 8 2009 18:43 | Last updated: March 8 2009 23:31 Falls in the value of financial assets worldwide might have reached more than $50,000bn, equivalent to a year’s global economic output, the Asian Development Bank will warn on Monday. Asia has been hit disproportionately hard, the bank will say, in a report that warns of many Asian stimulus plans lagging behind those of the leading global economies. ========================== The urgent need to keep consumers' spending must take immediate priority over fixing the global imbalances that many believed contributed to the financial crisis, Mr Summers told the Financial Times. "The old global imbalances agenda was more demand in China, less demand in America. Nobody thinks that is the right agenda now," said Mr Summers, who previously served as President Clinton's Treasury Secretary. "There's no place that should be reducing its contribution to global demand right now. It is really the universal demand agenda." The comments underlie the increasing fear that a collective reduction in spending around the world threatens to tip the global economy into a prolonged recession or depression for the first time since the 1930s. The volume of world trade is tumbling and Lord Mandelson will this week call on world leaders to reject protectionist policies. Mr Summers added that calls to reject free-market capitalism in the wake of the financial crisis should be resisted, although he admitted that flaws in the system had been exposed. "This notion that the economy is self-stabilising is usally right but it is wrong a few times a century. And this is one of those times..There's a need for extraordinary public action at these times." UK Unemployment To Hit 3.2 Milion UK Mortgage Lending Dives 43% In January British Home Prices Fall AgainPlunging assets cost $50,000bn
Larry Summers says global economy needs a 'universal demand agenda' now
Larry Summers, the chief economic adviser to President Barack Obama, has said that generating more demand and spending around the world must be placed at the top of the agenda to stop recession deepening.
Monday, 9 March 2009
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