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Bottom of crisis not in sight, New Zealand premier says
There is no way of knowing how deep the fallout from the global economic crisis will go, New Zealand's new prime minister, John Key, told business leaders from Asia and the Americas in Peru on Friday.
- Reuters
- Published: 23:27 November 22, 2008
Lima: There is no way of knowing how deep the fallout from the global economic crisis will go, New Zealand's new prime minister, John Key, told business leaders from Asia and the Americas in Peru on Friday.
Key, in what he said was his first foreign address since being sworn in as premier 24 hours ago, called on policy makers to do more to fix the global financial system.
'Unwind process'
"There is in fact no prec-edent for such a large and widespread leverage boom as we've experienced in recent years and hence no way of knowing how far the unwind process will have to run," he said at the Asia-Pacific Economic Cooperation summit in Lima.
Key, a former investment banker, said he was encouraged by global leaders who responded to the crisis with fiscal stimulus packages, like in New Zealand, state-sponsored bank bail-outs and coordinated interest rate cuts by central banks.
But he said more must be done to prevent asset bubbles and easy credit.
"Economies should consider if monetary policy, fiscal policy and prudential policy should be more counter-cyclical and lean against credit growth in an upswing," Key said.
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