U.S. Meltdown Reflects Regulators' Failures, Wu Says (Update1)
By Li Yanping and Nipa Piboontanasawat
Sept. 18 (Bloomberg) -- U.S. regulators failed to manage the risks of new financial products and China needs to learn the lessons to avoid its own meltdown, former central bank deputy governor
Wu Xiaoling said.
``The U.S. crisis reflects regulatory problems in the U.S. and innovative financial products that ignored basic economic rules,'' Wu told a financial conference in Beijing today. ``The U.S. crisis today would be China's tomorrow if financial products such as securitization are introduced without proper risk-control measures.''
China has resisted years of pressure from U.S. Treasury Secretary
Henry Paulson to open its financial system more quickly and add new products. Those barriers helped the nation limit its losses and writedowns from the credit-market crisis to less than 1 percent of the $516 billion global total.
``Now is the time for the Chinese to say that `you didn't do it quite right either,''' said
David Cohen, an economist at Action Economics in Singapore. ``The world is very dependent on China to help cushion the downturn.''
Bloomberg.com: Worldwide
The blame game starts...