THE WHITE HOUSE
Office of the Press Secretary
REMARKS BY THE PRESIDENT AND TREASURY SECRETARY RUBIN TO FINANCE MINISTERS AND CENTRAL BANK GOVERNORS Sheraton Luxury Collection Hotel Washington, D.C.
5:31 P.M. EDT
SECRETARY RUBIN: Mr. President, we've already had a chance to speak for a few minutes about the agenda and about what you'll be discussing. Let me just say now officially that we welcome all of you to this meeting, and it's a particular pleasure for me to be able to introduce the President.
All of us have been working, Mr. President, on these issues -- the issue of the current crisis and also future architecture, many meetings over the last several days, and we'll meet again tomorrow.
President Clinton has for a long time been very much focused not only on the issues of the moment as really began with Mexico in 1995, but also on this question of global architecture, and most recently by calling for an extension of reforms with respect to the global architecture beyond the topics that are being discussed here today, and before that, having called for the putting together of this group to consider the three areas that we'll be talking about this evening.
The objective of this meeting, Mr. President, is to focus on the crisis that we're now experiencing, focus on the lessons that can be learned from it, and then based on all of that, to look at three reports that will be coming to us from different working groups, and then discussing areas beyond that that could be considered in addressing the question of global architecture.
With that, let me say that it is a pleasure to introduce the man whose leadership has been absolutely central with respect to the American economy and who has been focused intensely from the day he walked into the Oval Office on the global economy and the inter-dependence of all our nations and how best to move forward in this global economy -- the President of the United States, William Jefferson Clinton.
THE PRESIDENT: Thank you. First of all, let me welcome all of you here to the United States. It is a great honor for us to host this terribly important meeting.
Three weeks ago, at the Council on Foreign Relations in New York, I asked Secretary Rubin and Chairman Greenspan to call together their counterparts from key emerging and industrial economies to discuss ways of building a new financial architecture for the 21st century and to also evaluate the specific measures that we should take together to deal with the current crisis. And I offered some ideas of my own on that day.
We began these discussions on reforming the international financial architecture at the G-7 meeting in Naples back in 1994. It seems like a century ago, when you think of how quickly the world has changed since then. In Halifax in 1995, the G-7 followed up with the establishment of the special data dissemination standard, the IMF supplemental reserve facility, the new arrangements to borrow.
But clearly this is not just a task for the G-7 alone. This is an issue which, as we see, affects every nation in the world. That is why last year when the APEC leaders met in Vancouver we called for a process that permitted the world's leading economies and the world's emerging economies to work together. And this effort began in April of this year.
The expansion of international markets and the growth of the global economy over the past 50 years has helped to lift millions and millions of people out of poverty; it has raised living standards for millions more. But as we see, the fast-paced, high-volume global capital markets also can react swiftly and harshly when countries stray from sound policies. And the markets also can overreact, subjecting even countries following good policies to severe pressures.
When the tides of global finance turn against a country, the human costs can be great. This weekend you've held important talks on the immediate steps we can take to limit the present financial crisis. And I was pleased to hear that both the G-7 and the IMF interim committee have agreed to look at ways of strengthening our capacity for stability by establishing a new precautionary financial facility to help countries ward off financial contagion. Every leading industrial economy has a role to play -- including the United States, by securing full support for IMF funding; Japan, by moving quickly to address its economic and financial challenges.
Tonight's meeting is an opportunity for us to look at not only the immediate crisis but to look further into the future. We must ensure that the international financial architecture is prepared for the new challenges of our time, especially the challenge of building a system that will lessen and manage the risks in the global market to allow countries to reap the benefits of free-flowing capital in a way that is safe and sustainable. I think this is imperative if we are to maintain global support among ordinary citizens for free markets and ultimately for free governments.
We must find ways that do not penalize those nations who follow strong economic policies in times of crisis; that will minimize the frequency, severity, and human cost of the financial crisis; that will put in place social structures to protect the most defenseless; and that will promote broad democratic support, which is necessary for economic change.
You are doing important work, perhaps the most important work the world can be doing at this moment in history. The institutional reforms that flow from all this work will shape the global financial system for the next half-century. The way we move forward using our work here tonight will help to determine the course of our children's future. We must do whatever it takes to build them a future of stable and sustained progress and limitless opportunity.
I am convinced that, as formidable as the challenge may seem, it is well within our grasp if we determine to do what it takes.
Thank you very much.
SECRETARY RUBIN: Mr. President, why don't we do this: my suggestion would be that we begin as we would have begun anyway, which is to have a discussion of the crisis -- as I said a moment ago, its analysis, its causes, as people to see it, their reaction to responses and all the rest, and why don't you just conduct the discussion.
THE PRESIDENT: Let me say, from my perspective, two things would be especially helpful to hear from all of you. First of all, briefly, what you think the causes of the present predicament are. And secondly, what you believe we should do, not only in the immediate present, but over the long run with the architecture of the financial system. And insofar as there are new ideas to be advanced, I think we owe it to ourselves to say not only what the potential positive impacts are, but whatever potential negative consequences might flow from the changes that we advocate.
And I would like to just suggest -- if they're willing, I'd like to ask the Head of the Mexican Central Bank, Mr. Ortiz, to begin; and perhaps Gordon Brown, the Chancellor of the Exchequer, would follow; and then, perhaps Minister of Finance Tharin from Thailand. And after those three talk, then we'll just open the floor and have a free-ranging discussion.
END 5:40 P.M. EDT