Asian crisis needs fast solution: Rubin

Asian crisis needs fast solution: Rubin

NEW YORK (Reuters): U.S. Treasury Secretary Robert Rubin said there is "clearly a serious issue" with respect to financial instability in Southeast Asia that needs to be resolved as soon as possible.

In a taped interview with the Nightly Business Report aired in New York, the treasury secretary said, "We have to work with the World Bank, the IMF and countries in the region to re-establish financial stability as quickly as possible," referring to the International Monetary Fund.

The interview was taped earlier Monday.

Later, in a live statement, Rubin confirmed that he was in touch with financial officials around the world and that the United States would continue to monitor financial markets.

In the taped interview, Rubin said it was in the interest of every party -- the United States, Japan, the global trading community -- to "focus with great intensity" in restoring stability to Southeast Asia.

Stock markets worldwide fell sharply on Monday. A 5.8 percent drop in Hong Kong's Hang Seng Index paved the way for a 7.2 percent plunge in the Dow Jones industrial average. The Dow plummeted 554 points, the biggest point drop ever, to 7,161.15 in a session halted twice when the drop triggered circuit breakers on the New York Stock Exchange.

Rubin also called on China to keep an open policy on Hong Kong -- where much of the recent turmoil has occurred.

"I think the overwhelming message ... is that sound policy and open markets lead to growth," Rubin said. "What we have to do is stay on the path and not get off the path."

Meanwhile, Rubin said Japan still needed to fix its huge trade surplus.

"Prime Minister (Ryutaro) Hashimoto said at the beginning of the year that his objective was to have domestic-led growth and also to avoid sustained significant increases in their trade imbalances, and that is a challenged that has not been met," Rubin said.

"And I think it is very important they meet that challenge. It's important for themselves and important for the rest of the world," he said

Rubin said in a statement in Washington that payment and market systems were working well despite the pressure exerted by large falls in the U.S. stock market.

In a brief statement read from the steps of the Treasury Department, Rubin said: "Our consultations indicate that the payment and settlement systems and other market mechanisms are working effectively."

He added: "It is important to remember that the fundamentals of the United States economy are strong and have been for the past several years and the prospects for continued growth, with low inflation and low unemployment, are strong."