By
Matthew
Russell Lee
UNITED
NATIONS,
September 15
-- The global financial meltdown triggered by predatory lending is still the focus of many International Monetary Fund Article IV reviews, such as that of Austria released under embargo on September 15.
The IMF says "the main impact of the crisis was on the internationally active banking system and public debt. Before the
crisis, Austrian banks had expanded rapidly in Central, Eastern and
Southeastern Europe (CESEE). As their funding dried up post-Lehman, and
their assets suffered from the end of the credit boom in CESEE, Austrian
banks came under pressure and needed government support."
Beyond the bailouts, Austrian banks now rely more on local deposits for
what lending they do. The IMF has yet to pursue this idea as is done in
the US Community Reinvestment Act. As to Austria, the IMF says: "In
most countries in CESEE, the decline in cross border funding has to a
large extent been offset by an increase in domestic deposits and the
level of credit has not declined. Notable exceptions include the
Baltics, Hungary, and Slovenia."
We'll have more on this.
On September 11, two days
after 124
nations in the
UN General
Assembly voted
to start
a process on
sovereign debt
restructuring,
Inner City
Press asked
the International
Monetary Fund,
"What is the
IMF's comment
on the
“sovereign
debt
restructuring”
resolution
adopted by the
UN General
Assembly on
September 9?
The resolution
cites the
IMF's work on
the issues, in
2003."
At the IMF's
embargoed
briefing on
September 11,
IMF
spokesperson
William Murray
provided a
long answer,
including that
the IMF is
working on a
"market based"
solution,
particularly
on debt
contractual
terms to
prevent "hold
out" problems.
He mentioned,
as he had to,
Argentina,
which has had
it own
contentious
relation with
the IMF.
Clearly,
Argentina --
and Bolivia as
chair of the
Group of 77 --
were aware of
these IMF
efforts when
they pursued
the issue in
the UN General
Assembly.
We'll have
more on this.
In the last
briefing,
Inner City
Press asked
the IMF about
ebola. This
time, Murray
cited the
economies of
Liberia and Sierra
Leone
shrinking 3 to
3.5%, and
Guinea by 1.5%.
On Portugal,
he said the
IMF has
received no
communication
about an early
pay-off.
Inner City
Press also
asked the IMF
for its view
of Cyrus'
foreclosure
laws -- sounds
like the IMF
doesn't like
them -- as
well as Yemen
and Egypt:
What
is
the IMF's view
of the partial
roll back by
Yemen's
government of
its initial
cut in fuel
subsidies?
On
Egypt,
what is the
status of the
IMF's work
with the
country? What
is
the IMF's
comment on
Bank of
America
Merrill Lynch
saying it
expects
no near-term
IMF engagement
with Egypt?
We'll have
more on this
as well.
When
Argentina's
foreign
minister
Héctor
Timerman held
a press
conference at
the UN at 5:30
pm on September
9, he was
flanked not
only by
Argentina's ambassador
to the UN
Maria Cristina
Perceval but
also the chair
of the Group
of 77, Sacha
Llorenti of
Bolivia.
They spoke of
11 countries
opposing their
resolution
on sovereign
debt and vultures
funds, or
sovereign debt
restructuring,
including the
United States.
Timerman took
the high road,
saying that
Argentina
would present
a project with
the G77 and
speak with all
opponents.
He asked how
the UN General
Assembly,
which he
called the
most
democratic
forum, could
be involved in
so many fields
but not this
one. Why
indeed.
Back
in June, Inner
City Press
thanked
Timerman and
his finance
minister Axel
Kicillof on
behalf of the
Free
UN Coalition
for Access,
then asked if
Elliott
Management and
Aurelius
Capital hold
stakes in
other G77
members, and
if the case
shows the need
for reform,
that countries
should have at
least the same
debt
restructuring
rights as
corporations.
Kicillof
added,
states and the
people (pueblos)
they
represented.
He said that
in the G77
meeting, Peru
had spoken. An
attentive
Inner City
Press reader
chimed in with
a question
about Ecuador,
which sold
bonds just
this week.
But in
that case, new
language tried
to avoid the
Argentina
decision of
the US Supreme
Court, just as
Belize and
Armenia have
also done on
their debt. Watch
this site.
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