§ Mr. CohenTo ask the Chancellor of the Exchequer if he will assess the extent of the devaluation of capital assets worldwide as a result of the financial crisis in East Asia and South America; and what its principal effects have been on Her Majesty's Government policy. [66727]
§ Ms HewittDespite recent gains in some East Asian and Latin American markets, stock values and currencies in these regions are still well below their levels of 18 months ago. But it is difficult to assess the direct effect of these price movements on global capital assets.
Because financial turbulence in Asia and the Americas has negative consequences for the inhabitants of those regions and poses a threat to global economic stability, the UK has taken a lead in finding solutions to the present turmoil. The G7 Declaration of 30 October 1998, which the UK brokered as G7 Chair, contained commitments to fight financial market contagion through an enhanced IMF facility; increase the transparency of the international financial system; enhance global financial regulation, in particular through better co-ordination between international financial institutions, national regulators and international regulatory bodies; and improve financial crisis prevention and resolution mechanisms, including the involvement of private sector creditors. G7 Finance ministers and Central Bank governors have also committed themselves to
create or sustain the conditions for strong, domestic demand-led growth and financial stability",reflected in the interest rate cuts in G7 countries in recent months.