World Bank ready to help East Asia but not with fund
15 Oct 2008 18:19:48 GMT Source: Reuters
(Adds quotes, background) WASHINGTON, Oct 15 (Reuters) - The World Bank is ready to help East Asian countries hit by the financial crisis, a senior bank official said on Wednesday, but denied reports that the Bank will contribute to a regional fund to buy toxic debt. "We do not anticipate the establishment of a regional facility and have not discussed commitments of funds at the regional level," World Bank Vice President for East Asia Jim Adams said in a statement. Philippines' President Gloria Macapagal Arroyo said earlier on Wednesday the World Bank had committed $10 billion to the fund. She said the 10-member Association of South East Asian Nations (ASEAN), its so-called dialogue partners of Japan, China and South Korea, the Asia Development Bank and the International Monetary Fund could also contribute. Adams said economies in the region were strong but he called for increased vigilance in the face of the spreading credit crisis. "The World Bank is supporting the initiatives of ASEAN members to share information and develop a coordinated response," Adams said, following weekend meetings of global finance chiefs, including officials from East Asia nations. "East Asian economies continue to perform strongly and have made significant changes since the 1997 Asian financial crisis, making them more resilient to the impacts of the current global turbulence," he added. Adams said the World Bank could comfortably double lending to emerging and developing countries that may be hit by the crisis which has started to affect the banking systems of countries outside the United States and Europe. The World Bank's private-sector arm, the International Finance Corp, said on Saturday it is considering setting up a $3 billion fund to capitalize small banks in developing countries that may be affected. The fund would start with $1 billion from the IFC and the other $2 billion would come from other sources such as governments, sovereign wealth funds or commercial banks. (Reporting by Lesley Wroughton)
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