WASHINGTON, April 16 (Reuters) - The following are highlights of the International Monetary Fund and World Bank meetings on Thursday in Washington, where finance ministers, central bankers and other top officials are gathering.
IMF MANAGING DIRECTOR CHRISTINE LAGARDE ON POSSIBLE GREEK PAYMENT DELAYS
“Payment delays have not been granted by the board of the IMF in the last 30 years. And it was eventually granted to a couple of developing countries, and that payment delay was actually not followed by productive results.
“So while ... all options are available to all countries, it is clearly not a course of action that would actually fit or be recommendable in the current situation. We have never had an advanced economy asking for payment delays. Payment delays are actually analyzed as additional financing granted to that country, and additional financing means additional contributions by the international community, some of which are in (a) much dearer situation than the country actually eventually seeking those delays.”
“You know, my advice has not changed. My advice is to get on with the work. ... The objective that we all pursue is to actually restore the stability of the Greek economy, but it is not done by a political, last-minute accord.
“It is done by actually looking at measures, committing to reforms, measuring what the outcome will be. It is the tedious work of finance ministers, wherever they are, and the lenders.
“So, certainly what I hope that we can continue doing at a faster pace and certainly more in-depth is precisely that exercise.”
“What I’m certain is that (Chair) Yellen is going to be very attentive, very careful. She will explain to all what she’s doing, how she’s doing it, when she’s doing it. And I think she’s given us a lot of signals as to what she will read... So it’s not going to come as a surprise.
“It will create some disruption, because there will be capital flows, certainly. But I don’t think we will have capital flows moving as much as took place back at the ‘tapering tantrum’ moment in May-June 2013. I think countries and central bankers have learned a lesson (from) that point.”
“The Asian Infrastructure Investment bank is ... the new kid on the block to actually respond to a massive need that is out there, which is infrastructure financing. People are talking not billions, they’re talking trillions needed to finance infrastructure in Asia.
“So if that institution is there to finance vital needs, that will push growth... and we can cooperate. If we can work together, that is excellent news. We are ourselves very supportive of this prospect, and we will happily cooperate and contribute to the extent helpful to this new institution.”
“Where I think the United States can certainly deliver is on the quota and governance reform of the IMF.... And one of (the IMF’s) raison d’etre is this legitimacy rooted in the good representativeness of the global economy. And we cannot live with an IMF of 10 years ago, when the world has changed so much...
“If the U.S. does not deliver on the reform, that it so much wanted back in 2010, then we run the risk of seeing other AIIB and others that will eventually offer an alternative to existing institutions, and that would be a very sad development.”
“The Chinese authorities know quite well what is desirable, what needs to be changed and improved in the monetary policy and in the financial sector in China.”
“And I believe what the Chinese authorities have actually indicated ... will naturally be conducive to an assessment of whether or not the RMB (renminbi) is freely usable, which is as you know one of the key criteria.”
GREEK FINANCE MINISTER YANIS VAROUFAKIS ON ALLEGEDLY BEING REBUFFED IN MEETING WITH IMF’S LAGARDE
“There was no rebuff by Madame Lagarde. You are very badly informed. We had an excellent conversation.”
“We are going to compromise, compromise, compromise, without being compromised.”
ON WHETHER APPROVAL BY GREECE’S PARLIAMENT OF AN EVENTUAL DEAL IS ASSURED
“If we reach an agreement, it will be approved by Parliament.”
ON FRUSTRATION THAT EVERYTHING HAS TO BE ON THE TABLE AT ONCE, IN NEGOTIATIONS:
“My fear is that when you discuss everything, you’re discussing about much.”
“We are concerned about potential spillover effects on EMDCs (emerging markets and developing countries) from monetary policy normalization in the U.S. and divergent monetary policies among advanced economies, with potential for increased exchange rate and capital flow volatility.”
RUSSIA’S FINANCE MINISTER ANTON SILUANOV ON ITS HOLDING OF $3 BILLION OF UKRAINE’S DEBT
“We’re not going to agree to any restructuring... We will wait for Ukraine to fulfill its obligations. If not, we will seek arbitration.”
“We were united in opinion that growth is relatively fragile; that growth is based first of all on growth in the United States and Great Britain. This has to do with the monetary factors of this growth.”
“We agreed on the course of action to create the BRICS bank. In July there will be a summit of our leaders, and the bank has to be launched before then.”
“More or less it (the ruble) is in a balanced position, though even this balance is quite dynamic, because it depends on how the economic situation develops and the balance of payments.”
“From the perspective of inflation, of course for us the strengthening of the dollar is a positive, as far as lowering inflation.
“So the ruble appreciation, all else being equal - if there will be no new significant negative factors - will allow us to lower our key interest rate.”
“These are not alternatives. They rather complement each other. I don’t think there’s less energy (around the BRICS bank), we didn’t feel that. To the contrary, all the representatives of all the countries were very motivated to reach speedy practical results.”
Prepared statement to International Monetary and Financial Committee:
“The global recovery remains weak and uneven, with geopolitical and financial risks increasing. Further progress by policymakers is necessary to deliver a strong and sustainable global recovery.”
“Accommodative monetary policy to support demand continues to be important. However, low-for-long monetary policy could generate financial stability risks and the use of appropriate macroprudential tools is also necessary to guard against these risks.”
GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE ON HIGH DEBT LEVELS IN GLOBAL ECONOMY
“Debt levels in the global economy continue to give cause for concern ... In China, debt has nearly quadrupled since 2007”
“China’s growth appears to be built on debt, driven by a real estate boom and shadow banks.”
“We are discussing things not only among the countries (of G7) who are willing to join, but also with the USA and Japan and also Australia.”
“As the acute crisis has passed, continued expansionary monetary and fiscal policies do not provide permanent solutions, but rather the negative side-effects start to prevail”.
“Priority must be given to a solid and stability-oriented fiscal policy, and structural reforms that facilitate a substantial increase of potential growth.”
“Risks for stability have increased as the adverse impact of key developments such as the U.S. dollar appreciation and lower commodity prices is concentrated on particular sectors and economies.”
“Monetary policy normalization in the U.S. will test the resilience of the financial sector.”
“We welcome that the IMF has started discussions on possible interim steps to achieve a meaningful progress towards the results of the pending 2010 reforms.”
“Such steps, however, should not be seen as a substitute for the 2010 reforms. The implementation of the 2010 reforms .... should remain the first priority”.
EUROPEAN CENTRAL BANK VICE PRESIDENT VITOR CONSTANCIO ON GREEK BANK EXPOSURE TO GREEK GOVERNMENT SECURITIES
“Not counting loans, but securities, government bonds, it is just about 3 percent of their total assets.”
“You have the number for Italy say around 10 percent, Spain is 9, Portugal is 7, so the (private sector involvement) has indeed reduced it (for Greece).”
EUROPEAN CENTRAL BANK EXECUTIVE BOARD MEMBER PETER PRAET ON ECB POLICY
“There is no question now of discussing tapering or the timing of exit (from QE). When the time comes, we will look not only at inflation, but at a batch of indicators. We are not at that stage today.”
WORLD BANK PRESIDENT JIM YONG KIM ON CHINESE SHADOW BANKING
“I think we feel overall that the Chinese authorities are very much on top of the current situation of indebtedness, public indebtedness, sub-national indebtedness, the rise of the shadow banks.
“Our own sense going forward is that the Chinese authorities are very well-equipped to deal with whatever might happen.
“We don’t think that the risk of a disorderly unwinding or a disorderly event related to the current sub-national indebtedness (in China) or the shadow banks is a high possibility.”
“No matter what other banks arise, the fact that we’re a global institution that can link global knowledge with lending will always be our hallmark.”
ON RELATIONS WITH CHINA AND ASIAN INFRASTRUCTURE INVESTMENT BANK
“China currently has a very strong voice in the World Bank, and indeed, the relationship and the cooperation and collaboration between China and the World Bank Group has only gotten stronger, especially in the last year. China now signaled to us they will be increasing their borrowing quite substantially over the next few years. ... Our expectation is that we will continue to have a very close relationship and that we will work with China to tackle their most complex and difficult issues.”
“Our full expectation is that we will be continuing to work with them very closely and that there are many projects that I could foresee either co-financing or working together on going forward.”
“We have been in close communication with the Chinese officials from the very beginning of talks (about) the AIIB. ... I suspect that in the early period we’ll play a much larger role in project preparation. We have much more technical expertise than the AIIB has right now. But there is no reason why we would not do a lot of the project preparation, for example, through our Global Infrastructure Facility, and then AIIB could be co-investor.”
EUROPEAN COMMISSIONER FOR ECONOMICS PIERRE MOSCOVICI ON COMMISSION’S DEALING WITH GREECE:
“Sometimes I’m asked, ‘Have you got a plan B?’ I say, ‘No.’ And I forbid everybody in the Commission to work about that. Why? Because the day you think about a Plan B, (it) means that you don’t believe in your Plan A. There is only one plan.”
“It would be a catastrophe for the euro zone ... We believe that this could be contained because first there is the size of the Greek economy, which is the smallest ... And second because we have tools now, banking union ... We could address that kind of financial exit. But politically it is another matter.”
“(The) monetary policy led by the ECB, which I’ll say again, I consider as fully appropriate.”
BANK OF JAPAN’S HARUHIKO KURODA ON JAPAN’S INFLATION OUTLOOK
“The IMF seems to predict that prices won’t rise much, but we think the output gap will narrow significantly and inflation expectations will heighten in the long run. We expect inflation to steadily accelerate toward 2 percent.”
“By and large the strength of the Indian economy is also reflected in the fact that (the) rupee has remained relatively within the stable range, and we do believe that the rupee will find its real value and real strength in the international currency market.”
ON INDIAN ECONOMY’S ABILITY TO WITHSTAND EXTERNAL SHOCKS
“I wouldn’t call it threats or risks if we continue with our own internal ability to carry on with our own reform process ... And as long as we continue that, I think our ability to absorb various international possible scenarios would be reasonably high.” (Compiled by Reuters’ IMF/G20 team)