Britain backs call for Asian crisis meeting

Britain backs call for Asian crisis meeting

LONDON (Reuters): Britain on Thursday gave its backing for a U.S.-proposed, top level international meeting on the Asian financial crisis.

The meeting would involve the Group of Seven (G-7) leading industrial countries and the Asian nations affected by the crisis.

A British Treasury official said Britain was in the early stages of discussing the format of the meeting with the United States, which called for such a gathering on Wednesday due to rising concern about the global ramifications of the crisis.

Other members of the G-7 -- France, Japan, Germany, Italy and Canada -- are also being consulted on the idea.

"We think the suggestion of a conference is a very constructive idea," the spokesman said.

But Japanese officials said they while they shared U.S. concerns over the region's economic woes, they had not yet been informed about any meeting.

Germany went a step further, saying there would be no special meeting ahead of a planned G-7 finance ministers and central bankers meeting in London on Feb. 21.

But Britain insisted a separate meeting was on the cards, although the spokesman said the regular London gathering would obviously consider the ramifications of Asian countries' plight.

The crisis has already caused great volatility in financial markets across the globe.

U.S. Treasury Secretary Robert Rubin said on Thursday in New York the Treasury and Federal Reserve Board were focused on making improvements to the framework of international financial institutions.

Without offering more information, such as when the meeting might take place, Rubin said it was "vitally important" that the architecture of international financial institutions be as modern as the marketplace.

Rubin said measures to improve the ability of the international system to deal with and prevent crises began with a meeting of G-7 leaders in Naples three years ago and continued with the Halifax initiatives a year later.

He said, however, "There is a great deal of additional work to do ... We, the Federal Reserve Board, and others are very much focused on the next set of improvements."

A U.S. Treasury source said the proposed gathering would address transparency, international financial institutions and rules, regulations and reporting standards.

There is speculation the conference could take place at the April meeting of the International Monetary Fund in Washington, which could help boost financial market confidence in global efforts to stabilize Asia.

The IMF has already been instrumental in setting up loans in the region to bail out debt-laden economies and Indonesia on Thursday agreed to an IMF package of sweeping economic reforms in a bid to stave off economic disaster.

International economic analysts said a simultaneous meeting could be a help.

"If there is a G-7 discussion at the same time as the IMF, it will make the whole thing seem much more co-ordinated and that could be a help in itself," Royal Bank of Scotland economist Marian Bell said.

But in general, they were skeptical that the meeting would offer more than fine words, particularly given the substantial financial aid already handed out by the IMF and individual countries such as the United States and Britain.

"I think there will be a general commitment to support the Asian countries but I don't think there will be much else," said Brian Hilliard, chief economist, UK, at Societe Generale. "Why provide an extra forum when we have already got the IMF (International Monetary Fund) as a reliable conduit for those countries which need help?"

And the special meeting is unlikely to come up with any miracle policy prescriptions for the afflicted Asian countries given that each faces different root causes of their problems.