Ban calls for more action and coordination to counter global financial crisis
13 October 2008 – Secretary-General Ban Ki-moon today called for more action over the global financial crisis following
the “laudable” steps taken by major economies and international financial institutions over the weekend, voicing deep
concern over the impact of the crisis on the developing world, particularly the poorest of the poor.
“More coordinated approaches, including direct intervention by governments of the major economies, are necessary to
recapitalize the banking system and guarantee the savings of ordinary people,” he said in a statement.
“The initiatives by the World Bank and the IMF [the International Monetary Fund] to provide new emergency liquidity
provisioning to poor countries could help them counteract some of the consequences of this crisis. But more needs to be
done,” he added, calling for urgent reform of the global financial system.
“The ad hoc manner in which governments have had to respond to the management of this crisis is reflective of serious
lacunae in the current world financial system. To ensure continued stability and protect the economic gains of both
developed and developing countries, we need to consider deep and systemic reforms based on an inclusive multilateralism
for a global financial system that can better meet the challenges of the 21st century.”
Mr. Ban’s appeal followed similar calls for reform over the weekend from UN Under-Secretary-General for Economic and
Social Affairs Sha Zukang, who told several economic summits in Washington that the crisis was clear proof of the urgent
need to reform the international monetary and financial system set up during three weeks of talks in Bretton Woods in
New Hampshire, United States, in July 1944.
“The current crisis throws a spotlight on the international community’s failure to adequately address systemic issues,”
he said, calling for more effective regulatory frameworks, particularly in financial markets.
Other areas that “require critical attention” include improved risk monitoring and crisis avoidance as well as
management better suited to the realities of contemporary global financial integration and more universal and equitable
distribution of voice and representation in global decision-making bodies.
There also must be follow through, in an accountable manner, on all international commitments made in the areas of aid,
trade, debt reduction, and access to technology and affordable medicines in support of developing country efforts to
achieve the Millennium Development Goals (MDGs), Mr. Sha said, referring to the ambitious UN programme to reduce a host
of social ills such as hunger, poverty and lack of access to medical care and education, all by 2015.
“Progress on the question of how existing mechanisms can provide financing on the scale and in the form required to
address climate change is urgently needed,” he added, stressing the limitations of relying solely on voluntary
mechanisms and on the amount of financial resources identified for climate change to date.
“It is critical that the international community reach agreement on financing targets and mechanisms to which all
parties can be held accountable in the negotiations under the United Nations Framework Convention on Climate Change
(UNFCCC),” he declared. “Deficiencies in global governance, already much in evidence in the financial crisis, will
therefore have to be overcome in order to adequately and effectively address climate change.”
Mr. Ban and Mr. Sha said a Financing for Development Conference next month in Doha, Qatar, provided an important
opportunity to ensure that current financial difficulties do not undermine commitments already made to provide more aid
and other financial resources for the achievement of the internationally agreed development goals.
The UN expects world gross product (WGP) growth to decline to a recessionary pace below 2 per cent for 2008, down from
the 3.8 per cent of 2007, implying zero growth in world per-capita income and likely falls in income for a large
proportion of the population, particularly the poor. The outlook for 2009 will be even worse, with the growth of WGP
expected to drop to about 1 per cent, he noted.
Growth in developing countries and economies in transition is expected to decelerate on average by about 2 per cent in
2008, from the previous year, and by another 1 per cent or so in 2009.
“The root cause of the global financial crisis is deeply embedded in policy deficiencies in the international financial
system and in the unsustainable fundamentals of the world economy,” Mr. Sha declared. “The prospect of a systemic world
financial breakdown –and, consequently, a long lasting economic slowdown – is real.”
ENDS