(CNN) -- The former head of the U.S. Federal Reserve has said that the U.S. is "in the midst of a credit tsunami," -- but that it will emerge from the credit crisis with a "far sounder financial system."
Fears of recession continued to cause turbulent swings in stock markets worldwide Thursday. In New York, shortly after opening, the Dow Jones industrial average was trading more than 3 percent higher than Wednesday's close.
Alan Greenspan, who chaired the reserve from 1987 through 2006, also added Thursday that whatever regulatory changes are made to respond to the crisis, "they will pale in comparison to the change already evident in today's markets."
Greenspan, who some analysts say did not do enough to control financial institutions during his two-decade tenure, made his comments in prepared testimony to the House of Representatives Oversight and Reform Committee.
He added that markets would emerge from the crisis "far more restrained" than as a result of "any currently contemplated new regulatory regime" and that "investors, chastened, will be exceptionally cautious."
London's FTSE 100 index of leading shares was down more than 4 percent in midmorning trading, while Germany's DAX 30 was down 3 percent and France's CAC 40 down by more than 2 percent. But by midafternoon they had recovered some of their losses. Watch how the markets progress
The economic turmoil will be the focus of the two-day, 43-nation Asia-Europe Meeting, which opens Friday in Beijing, according to European Union President Jose Manuel Barroso, speaking at the EU's Beijing office Thursday.
Leaders hope this week's summit in China will help bring agreement on a response to the crisis ahead of a November 15 meeting hosted by U.S. President George W. Bush in Washington.
"We need a coordinated global response to reform the global financial system. We are living in unprecedented times and we need unprecedented levels of global coordination," The Associated Press reported Barroso as saying. "It's very simple. We swim together or we sink together."
Barroso outlined no specific proposals but said a solution needed to be based on transparency, responsibility, cross-border supervision and global governance. He also said the world's financial system needed "major reform." Do we really need to rebuild, asks Charles Hodson
The current financial turmoil was sparked by the U.S. housing market collapse and a credit freeze in the United States and around the globe that is showing signs of affecting economic growth.
In Tokyo Thursday, the Nikkei declined 2.5 percent by late afternoon while South Korea's KOSPI closed down 5 percent. The All Ordinaries index in Australia declined 4.4 percent, and Hong Kong's Hang Seng index was down 3.5 percent.
The Asian indexes declined after the Dow lost 514 points, or 5.7 percent, on Wednesday. Video Watch how Asian markets fall »
Amid the wild swings in both stocks and commodities over the last few weeks, "fundamentals matter very little right now" in the U.S. market, said Ned Riley, chief investment strategist at Riley Asset Management.
He said that most of what is happening is being driven by traders with a very short-term perspective.
On the upside, lending rates continue to improve, as the efforts of world governments to stabilize financial markets started to kick in. But any relief about the improvement in the credit market has been overshadowed by recession fears.
"Some of these programs are starting to work, but it's going to take a while for borrowing to reach the consumer," he said.
The declines on these markets comes after the Dow Jones industrial average lost 514 points, or 5.7 percent, on Wednesday -- the Dow's seventh worst ever point loss.
"The credit crunch seems to be behind us, and we are shifting focus to corporate earnings and economic conditions, and clearly both are deteriorating," Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong, told The Associated Press.
Main Street bank Wachovia -- which is due to merge with Wells Fargo -- reported a heavier-than-expected third quarter loss of $23.9 billion. Will volatility continue, asks Todd Benjamin
Internet company Yahoo said it would cut its workforce by 10 percent following net income decline of 51 percent, while pharmaceuticals company Merck said it will lose 12 percent of its staff.
And aircraft maker Boeing said its earnings had dropped 33 percent through a prolonged industrial dispute.
Nenhum comentário:
Postar um comentário