U.S. optimistic on financial services accord
U.S. optimistic on financial services accord
JAKARTA (JP): A senior United States Treasury official told a group of panelists here yesterday that he is confident a global financial service deal will be concluded by June 30 despite the recent Mexican crisis and the falling dollar.
"I do not believe that Mexico's financial problems should be a reason for countries to hold back on reaching an agreement on the opening of financial services," said Jefferey Schafer, addressing a group of panelists about the trade of financial services set up under the new World Trade Organization.
The panel talk was held by Worldnet and the United States Information Service at the U.S. embassy here yesterday.
The area of financial services -- including banking and insurance -- was set aside at the end of the seven-year Uruguay Round negotiations last year.
Last month the United States pledged to give equal treatment to all signatories on the General Agreement on Tariffs and Trade provided they make substantial commitments to opening up their financial services sector to outside competition.
Looking back at the Mexican crisis in January, Schafer suggested that the Mexico could have avoided the problem had there been a greater presence of foreign banks injecting more capital into the economy.
"Remember, the goal of this accord is to create a strong network of global financial institutions," he said.
Currency
The official, however, refused to discuss the impact that the slipping U.S. currency against the Japanese yen and German Deutsche mark might have on reaching the accord by its deadline of June 30.
Market reports from London and Tokyo yesterday said that the dollar steadied nervously in European trade after plunging to a new post-war low against the yen in the Far East.
Dollar buying by the U.S. Federal Reserve, the German Bundesbank and the Bank of Japan earlier this week proved largely ineffective.
The dollar was trading at around 84 yen in mid-morning, above a fresh 83.65 yen low seen overnight. Against the mark it climbed to 1.3770 from 1.3730 late on Thursday.
"I could repeat what Treasury Secretary Robert Rubin said recently: a strong dollar will benefit the U.S. economy and the Treasury will only intervene if it makes sense," he said.
Schafer also said that once the June 30 deadline is passed, the U.S. will be "interested" in setting further deadlines to implement concrete measures to open the trade of financial services.
Such datelines, he said, would be "negotiable and discussed on a country by country basis as long as there is a clear commitment in opening up markets."
One example of U.S. concern with Indonesia's commitment to a more open sector is the regulation that requires foreign banks to have higher capital than domestic banks, he said.
"Sure it does not keep everybody out but it is a concern," he said.
Three leading U.S. investment banks deciding recently to establish a presence here are Salomon Brothers, Goldman Sachs and Merrill Lynch. (hdj)