Bankers at the third Ibsa Business Summit, under way in Delhi, expect that India, Brazil, and South Africa will likely benefit from the dramatic multibillion-pound and -euro bail-out for British and European banks announced on Monday, involving the partial or total nationalisation of some major financial institutions, and the related news that the US is likely to follow suit in taking equity in distressed banks.
"I think the bail-out is very relevant to the Ibsa countries," affirms Banco do Brasil chief representative in Hong Kong Paulo Roberto Ferreira. "Despite not having direct exposure, these countries still depend on developed countries for investments and trade."
It was essential to stabilise the markets. "Otherwise you will have no real economy, to keep people employed."
"Regarding the global credit crunch, nobody has not been affected," points out First Rand Bank Gauteng provincial chairperson Bobby Madhav. The rescue plan is "very good for the global banking sector."
"What impacts India is is access to global capital," highlights Citibank India capital markets origination VP Ramakrishna Ganapathy.
"If the global capital markets were shut, we would still have access to domestic capital, so the impact on India would be limited. But we still need access to global capital, so fixing the problem benefits India.
"That they are taking action is to be welcomed. It is important to fix the crisis.The financial system runs on trust and confidence and it needs to be fixed to restore confidence."
"I think there is no other alternative," to the bail-out, "it's not a good thing," argues Ferreira. "Mistakes were made and should be punished. But there is no other option. We have to get the markets back on track."
"This was definitely an accident that could have been avoided," states Ganapathy. "But, having got to here, they must plug the hole."
The crisis could, however, accelerate the development of trilateral trade and investment between the Ibsa countries in particular, and developing countries in general, as they seek alternative markets and sources of investment, in the face of the looming downturn in the developed world.
"This crisis has affected many economies a lot. We have a recession coming up in Europe, the US, and Japan," asserts Ferreira.
"I think that all emerging countries will be looking at each other more closely. Not only the Ibsa countries. This is a natural process."
"I think this crisis does open a lot of dialogue between the three (Ibsa) countries. This gives us the opportunity to expand beyond South Africa," notes Madhav, pointing out that South Africa is no longer dependent just on developed world markets. "We have increasing links with other countries of the South, which is excellent. All three Ibsa countries have excellent capabilities."
Banks in all three Ibsa countries have been relatively insulated from the developed world financial crisis. "We were well insulated," assures Madhav.
"South African banks are highly regulated and well capitalised. We are very complimentary of what our Reserve Bank has done. Regulation has protected the South African banks. We're well diversified in investments, and not concentrated in one sector."
"The Ibsa countries have been fairly well insulated, and that will continue," agrees Ganapathy.
"The Indian regulatory system has done a wonderful job."
By: Keith Campbell
Published: 14 Oct 08 - 11:48
(Keith Campbell attended the Third Ibsa Summit in Delhi as the guest of the India Brand Equity Foundation of the Confederation of Indian Industries.)
Creamer Media's Engineering News
No comments:
Post a Comment