HIGHLIGHTS -IMF, World Bank, G20 meetings in Washington

Reuters

WASHINGTON, Oct 12 (Reuters) - The following are comments on

Saturday from finance officials in Washington for the fall

meetings of the International Monetary Fund and World Bank.

SWISS NATIONAL BANK CHAIRMAN THOMAS JORDAN:

"We still have a strong currency, the Swiss franc is highly

valued ... even after the situation at the moment with fiscal

policy in the United States, the exchange rate remained above

the minimum."

"We have a very stable situation at the moment, the minimum

exchange rate remains extremely important, this is a crucial

tool of our monetary policy in order to avoid the tightening of

monetary conditions in Switzerland."

IMFC COMMUNIQUE ON ADVANCED NATION POLICIES

"The eventual transition toward the normalization of monetary

policy in the context of strengthened and sustained growth

should be well timed, carefully calibrated, and clearly

communicated. Where country circumstances allow, medium-term

fiscal plans should be implemented flexibly to take account of

near-term economic conditions to support growth and job

creation, while placing government debt on a sustainable

track...

"The United States needs to take urgent action to address

short-term fiscal uncertainties. The euro area should build on

progress toward banking union and further reduce financial

market fragmentation. Japan should implement medium-term fiscal

consolidation, and structural reforms to invigorate growth."

IMFC ON FOREX, PROTECTIONISM, FINANCIAL REFORMS

"We reaffirm our commitment to refrain from competitive

devaluations and all forms of protectionism. Global financial

reforms, including in the areas of 'too-big-to-fail,'

international capital standards, cross-border resolution,

derivatives markets, and addressing the potential systemic risks

in shadow banking, need to be implemented promptly and

consistently."

IMFC STATEMENT ON FUNDING

"External financing, including on a precautionary basis, can

help facilitate orderly adjustment. The Fund continues to be

prepared to offer financing to support appropriate adjustments

and reforms."

IMFC STATEMENT ON QUOTA REFORM

"We continue to attach the highest priority to the IMF

governance and quota reform to enhance the Fund's credibility,

legitimacy and effectiveness. We urge all members who have yet

to ratify the 2010 reforms to do so without delay. We remain

committed to completing the 15th General Review of Quotas by

January 2014, and urge the Executive Board to agree on a new

quota formula as part of that review."

SINGAPORE FINANCE MINISTER THARMAN SHANMUGARATNAM, IMFC

CHAIRMAN, ON SPILLOVERS

"The spillovers that come about from large country policies

were uniformly acknowledged. Everyone knows that these are

inevitable consequences as policies are reset. And there was a

consistent view, from the emerging market economies, that the

eventual normalization of monetary policy ... as the economies

recover in the West will be a net positive."

"The key task is to focus on the transition, prepare

ourselves well for this eventual normalization. It's not

imminent but it will happen."

ARGENTINE ECONOMY MINISTER HERNAN LORENZINO

ON GROWTH OF EMERGING ECONOMIES:

"We consider that there is an excess of generalization in

the overall analysis on the diminishing strength of emerging

markets without due distinction of regions with stronger

positions and buffers. Furthermore, as far as most problems are

of a cyclical nature, (emerging markets and developing

countries) as a group will continue to grow at a steady,

sustained and strong speed to remain the driving force of the

global economy."

CHINA'S DEPUTY CENTRAL BANK GOVERNOR YI GANG

ON RISKS FROM UNCONVENTIONAL MONETARY POLICIES:

"While unconventional monetary policies helped stabilize

growth and financial markets in advanced economies after major

crises, more attention should be given to the risks associated

with the prolonged use and disorderly exit of such policies."

ON WHAT TOOLS NEEDED TO DEAL WITH QE SPILLOVERS:

"A flexible policy stance and enhanced safeguarding

measures, including emergency swap lines, will also be helpful

in assisting the economies in facing the challenges posed by the

external environment."

ON EXCHANGE RATE:

"The Chinese authorities remain committed to exchange rate

reform, and will enhance a two-way movement in the renminbi

exchange rate around the appropriate equilibrium level."

ECB GOVERNING COUNCIL MEMBER JENS WEIDMANN

ON THE WITHDRAWAL OF MONETARY SUPPORT:

"Central banks cannot simply keep stepping on the monetary

gas pedal for eternity. A firming in economic conditions in

developed countries makes it more probable that there will be a

gradual withdrawal of unusually expansive monetary policy."

GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE

ON SPILLOVERS:

"Accommodative monetary policies continue to support the

global recovery. It would be wise to prepare for the unavoidable

transition to more normal monetary conditions, while keeping a

watchful eye on risks arising in the current low-interest rate

environment."

ON IMF REFORM:

"U.S. Congress ratifying the last reform is the prerequisite

for taking the next step. Then we Europeans will feel the heat a

bit more because we have to provide our second seat."

"The other question is the quota formula, and we will

continue to insist that an economy's openness should be an

important part of the reform."

"If you want sustainable global growth, you must ask for

more transparency from economies."

MALAYSIA CENTRAL BANK GOVERNOR ZETI AKHTAR AZIZ

ON UNCONVENTIONAL POLICIES:

"The unconventional policy measures adopted by the major

advanced economies were effective at the height of the global

financial crisis. Market functioning was broadly restored, and

tail risks declined significantly. Nonetheless, evidence that

the measures have resulted in the resumption and reinvigoration

of growth has not yet to be forthcoming."

ON MANAGING NORMALIZATION OF MONETARY POLICY:

"In this extraordinary (monetary policy environment), the

IMF's policy toolkit needs to be expanded to include policy

tools for (emerging markets and developing economies) to manage

the challenges and implications of the continued implementation

of such policy measures, as well as the eventual exit of these

measures."

SAUDI ARABIAN MONETARY AGENCY GOVERNOR FAHAD ALMUBARAK'S

STATEMENT TO THE IMFC

ON THE U.S. BUDGET IMPASSE:

"Agreements on increasing the debt ceiling and on a

continued resolution to fund government agencies should be

reached soon. Any delay in these areas could impact market

confidence and undercut growth. In view of these developments,

the argument for a strong medium-term fiscal consolidation plan

to replace the sequester is more valid than ever."

ON ARAB ECONOMIES:

"Arab countries in transition ... continue to face important

challenges, including restoring stability and growth to be in a

position to offer job opportunities, particularly for the

educated youth. In this process, these countries continue to

deserve strong support from the international community. While

these countries are benefiting from strong financial support

from Saudi Arabia and other donors in the region, we encourage

other donors to step up their contributions. We call on the Fund

to fulfill its catalytic role and remain engaged and tailor its

support to the need of each country."

RUSSIAN FINANCE MINISTER ANTON SILUANOV

ON ADVANCED ECONOMIES:

"The sustainability of renewed growth in advanced economies

is questioned by many analysts. Indeed, this growth is taking

place against the backdrop of unprecedented monetary

stimulation. In effect, we are witnessing a return to the old

model of growth based on low interest rates and rapid credit

expansion, which led to the global financial crisis in the first

place."

ON FINANCIAL RISKS:

"We are concerned that the low interest rates environment

already in place for many years is leading to the emergence of

new financial risks, since the search for yield makes investors

buy risky low-quality assets."

ON FINANCIAL TURMOIL FROM MONETARY EXIT:

"We expect that the approaching exit from unconventional

monetary policies and normalization of interest rates will be

accompanied by considerable turmoil in the financial markets.

The assumption that the asset price correction that began this

summer has already been largely completed does not seem to be

plausible to us."

ON UNCONVENTIONAL RESPONSE FROM EMERGING MARKETS:

"It is difficult to say at this stage what sort of

conclusions (emerging market) countries will draw from the

recent developments. Perhaps, next time they may want to respond

to unconventional monetary policies in advanced economies with

some kind of unconventional policies of their own."

LITHUANIA MINISTER OF FINANCE RIMANTAS SADZIUS

ON FOSTERING STABLE GROWTH:

"To foster stronger growth and employment, monetary support

must be complemented by credible medium-term fiscal policies and

structural reforms. History has shown that long periods of easy

money can contribute to the build-up of risks. The IMF should

carefully monitor all such developments."

SPANISH ECONOMY MINISTER LUIS DE GUINDOS

WITHDRAWAL OF US MONETARY STIMULUS:

"Monetary conditions should remain accommodative as long as

needed and, in the case of the United States, exiting from

monetary stimulus, when appropriate, needs to be clearly and

timely communicated as well as mindful of its spillovers in

other countries."

SOUTH KOREAN DEPUTY PRIME MINISTER AND MINISTER OF STRATEGY

AND FINANCE OH-SEOK HYUN

ON WITHDRAWAL FROM UNCONVENTIONAL MONETARY POLICY (UMP):

"While exit from UMP should suggest a strengthening in key

advanced economies...a disorderly withdrawal could cause

significant disruptions to financial markets and lead to large

abrupt outflows of capital. Economies can prepare for the

reversal of capital flows associated with exit by embracing

flexible policy settings and building adequate fiscal and

external buffers to guard against disorderly adjustments."

"For UMP central banks, clear and effective communication

will be critical to the success of tapering as evidenced by

financial markets' heightened sensitivity to announcements on

monetary policy earlier this year."

ON IMF QUOTA REFORM:

"Maintaining the legitimacy, credibility and effectiveness of

the IMF is only possible when governance and quota reforms keep

pace with the shift in the relative economic weights of its

members."

GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE

ON IMF REFORM:

"The usual governance questions are before the IMF. The U.S.

Congress must also actually (progress) with the ratification of

the last round to give the starting signal for the next step."

AUSTRALIAN TREASURER JOE HOCKEY

ON IMF OUTLOOK:

"There are high expectations for us as the chair of the G20

next year that we will have a simple agenda, not a complicated

or overly ambitious agenda, and that we will focus on real

outcomes."

JAPAN DEPUTY PRIME MINISTER AND FINANCE MINISTER TARO ASO

ON FED TAPERING:

"The U.S. tapering of quantitative easing could have

potential spillover effects on emerging market economies; this

would need to be properly addressed. It is of foremost

importance that emerging market economies steadily implement

appropriate macroeconomic policies, structural reforms, and

appropriate micro- and macro-prudential supervision in order to

make their economies more resilient to external shocks."

ON IMF REFORM:

"To enhance its legitimacy, effectiveness and credibility,

it is essential that the Fund make continuous efforts to

complete its own governance reforms, including the quota

review."

"Japan believes that due consideration to the records of

financial contributions, and to the quota shares of emerging and

developing countries, are mutually compatible issues."

ITALY MINISTER OF ECONOMY AND FINANCE FABRIZIO SACCOMANNI

ON IMF REFORM:

"Considering the tight deadline of January 2014 agreed at

the political level, it is of the essence to deliver on our

commitments, including the agreement on a quota formula within

the context of the 15th General Review of Quotas. In this

respect, a balanced and comprehensive package - that deals with

all the issues in the quota formula - and a spirit of compromise

by the whole membership are needed."

EUROPEAN CENTRAL BANK'S EWALD NOWOTNY STATEMENT TO THE IMFC

ON THE U.S. BUDGET IMPASSE:

"Prolonged uncertainty about the U.S. budget process has a

potentially large disruptive impact throughout the world. The

exit from the Fed's unconventional monetary policy has been put

on hold as the recovery and employment gains are yet to prove

their durability. Policy uncertainty is yet again at the

forefront in the U.S. and threatens the promising private

sector-led rebound in activity."

ON U.S. FEDERAL RESERVE POLICY COMMUNICATIONS:

"We also encourage the U.S. Federal Reserve to engage

international dialogue in order to minimize unwarranted negative

spillovers from the exit of its unconventional monetary policy

measures on other countries."

ON THE RISK TO EMERGING MARKETS FROM FED POLICY TIGHTENING:

"The policymakers in countries under market pressure should

use the delay in the Fed's tapering to address these imbalances

in order to be better prepared for the eventual monetary

tightening in the U.S...Structural reforms and flexible policy

frameworks including exchange rates will be essential, while

capital flow management measures, FX interventions and

prudential policies can at most smooth the adjustment process."

"Global financial stability is a shared responsibility. The

Fed should therefore clearly communicate the path of its

intended policy actions to minimize negative spillovers which

could undermine the policy adjustment efforts of emerging

markets."

SOUTH AFRICAN FINANCE MINISTER PRAVIN GORDHAN

ON RISKS TO GLOBAL ECONOMY FROM U.S. FISCAL POLICY, FED EXIT

"Uncertainty regarding the unwinding of unconventional

monetary policies and the threat of potentially devastating

budgetary challenges continue to pose serious risks to the

global economy. In particular, clarity in the communication of

an exit strategy regarding the withdrawal of monetary stimulus

is critical in minimizing the negative impact thereof."

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