THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets. Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.
by the Bank for International Settlements last year, the two-day talks
are shrouded in secrecy with high-level security believed to have been
invoked by law enforcement agencies.
Speculation that the chairman
of the US Federal Reserve, Dr Ben Bernanke, would make an appearance
could not be confirmed last night.
The event will be dominated by
Asian delegations and is expected to include governors of the Peoples
Bank of China, the Bank of Japan and the Reserve Bank of India.
The arrival of the high-powered gathering coincided with a fresh
meltdown on world sharemarkets, sparked by renewed concerns about global
growth and sovereign debt.
Fears countries including Greece,
Portugal, Spain and Dubai could default on debt repayments combined with
disappointing US jobs data to spook investors.
Australia's ASX 200 slumped 2.4 per cent, to a its lowest close since November 5, echoing a sharp fall on Wall Street.
share markets were also pummelled, with Japan's Nikkei 225 down almost 3
per cent and Hong Kong's Hang Seng slumping 3.3 per cent.
The damage was also being felt by European markets last night with London's FTSE 100 down sagging 1 per cent in early trade.
debt fears rippled through to the Australian dollar which was hammered
to a four-month low of US86.43 and was trading at US86.77 cents last
"This does feel like '08 and '07 all over again whereby we
had these sort of little fires pop up and they are supposedly contained
but in reality they are not quite contained,'' said H3 Global Advisors
chief executive Andrew Kaleel.
"Dubai should have been an isolated incident and now we are seeing issues with Greece, Portugal and Spain.''
wasn't all bad news with the RBA yesterday upping its Australian growth
forecasts and flagging more interest rate rises this year.
central bank estimates the economy grew 2 per cent in 2009, and will
expand by 3.25 per cent in 2010, and by 3.5 per cent in 2011.
The outlook for global growth is likely to be a key theme of the high level central bank talks.
gathering also comes at an important time for the BIS as it initiates
an overhaul of the global banking system which will include new capital
rules applying to banks and more stringent standards regulating
A key part of the two-day talkfest will be a
special meeting of Asian central bankers chaired by the governor of the
Central Bank of Malaysia, Dr Zeti Akhtar Aziz.
Influential BIS general manager Jaime Caruana is also expected to take a prominent role in the talks.
Federal Treasurer Wayne Swan will address the central bank officials at a dinner on Monday night.