AFP, Frankfurt
The global financial crisis has hit international trade because banks have become wary of financing deals, World Bank president Robert Zoellick said yesterday.
"Trade is largely financed by credit" which has become tighter as banks retrenched following the collapse of the US market for high risk, or subprime mortgages, and the failure of US investment bank Lehman Brothers, Zoellick said at the 10th German World Bank Forum.
Dow Jones Newswires reported Zoellick as saying that the World Bank was in discussion with the United States and China as well as other partners to work out how to finance trade. "This will be critical" in fighting the global economic slowdown, Zoellick said. Lars Thunell, head of the World Bank's private sector lending arm the International Finance Corp., said the IFC was providing banks with guarantee facilities to back loans for trade.
The World Bank meanwhile, forecast a decline of about 0.1 percent in economic activity in the developed world next year while the developing world's growth rate will slow to about 4.5 percent, down from the previous estimate of 6.5 percent.
Global growth will therefore be only "modest," Zoellick said.
In Siem Reap, Cambodia, the world's poorest countries called on rich nations Thursday to continue giving aid despite the global financial crisis.
The appeal from trade ministers and representatives from nearly 50 Least Developed Countries ended two days of talks in Cambodia's tourist hub to discuss trade and the credit crunch.
The global financial crisis has hit international trade because banks have become wary of financing deals, World Bank president Robert Zoellick said yesterday.
"Trade is largely financed by credit" which has become tighter as banks retrenched following the collapse of the US market for high risk, or subprime mortgages, and the failure of US investment bank Lehman Brothers, Zoellick said at the 10th German World Bank Forum.
Dow Jones Newswires reported Zoellick as saying that the World Bank was in discussion with the United States and China as well as other partners to work out how to finance trade. "This will be critical" in fighting the global economic slowdown, Zoellick said. Lars Thunell, head of the World Bank's private sector lending arm the International Finance Corp., said the IFC was providing banks with guarantee facilities to back loans for trade.
The World Bank meanwhile, forecast a decline of about 0.1 percent in economic activity in the developed world next year while the developing world's growth rate will slow to about 4.5 percent, down from the previous estimate of 6.5 percent.
Global growth will therefore be only "modest," Zoellick said.
In Siem Reap, Cambodia, the world's poorest countries called on rich nations Thursday to continue giving aid despite the global financial crisis.
The appeal from trade ministers and representatives from nearly 50 Least Developed Countries ended two days of talks in Cambodia's tourist hub to discuss trade and the credit crunch.
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