The New Nation - Internet Edition

BUSINESS REPORT

A Roundtable on the Impact of Financial Crisis in South Asia was held on the 10th October at the World bank Headquarters in Washington, DC in the sidelines of World Bank/ IME Annual Meeting Prof Joseph Stiglitz, Noble Laureate and former Chief Economist of the World Bank, Dr Ragu Rajan, the Former Chief Economist of IMF, Dr Salehuddin Ahmed, Govenor, Bangladesh Bank spoke.

Among others, the Govenor of the Reserve Bank of India and Pakistan also spoke. Prof Stiglitz said the present global financial crisis is due to inadequate regulation and poor supervision of the banks and investment firms in the USA. Dr Ragu Rajan emphasized on comprehensive package for overcoming the problem to boost up confidence of people.

Governor, Bangladesh Bank pointed out that the banks in Bangladesh are not very much exposed to the banks and investment firms in the USA and Europe. Therefore, the ripples of financial sheck into the financial systems will be less likely in the short run. Besides commercial banks in Bangladesh are taking appropriate measures so that their find kept in the banks abroad are not adversely affected.

The liquidity position of the commercial banks in Bangladesh is good and no commercial banks have come to the central bank for massive liquidity support or they did not request for support for insolvency, the Governor of Bangladesh Bank added.

However, if the global crisis is prolonged and depended in the developed countries the effect via real sector like export and import may have adverse impact on Bangladesh.

Moreover, if the Official Development Assistant (ODA) and bi-literal fund flow slowdown, pressures on government budget will be strong and may affect government's on-going poverty alleviation, social safety net, health and education program, the Governor observed.