Crisis measures valued at over a trillion dollars: study

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The legacy of emergency measures undertaken by G20 governments to lift economies out of the global recession stood at over a trillion dollars in May, international agencies said on Monday.

"Thirteen countries continue to carry outstanding assets and liabilities left as a legacy of emergency schemes even once those schemes have been closed to new entrants," said a report by the Organisation for Economic Cooperation and Development and the UN Conference on Trade and Development.

"This legacy of emergency measures is large; the total amount of public commitments -- equity, loans and guarantees -- on 20 May 2010 exceeded one trillion dollars," it added.

"In the financial sector, public expenditure commitments for certain individual companies reach hundreds of billions of dollars, and individual companies in the non-financial sectors have received advantages worth several billion dollars each."

Only about a tenth of financial firms have repaid their public loans, repurchased equity or relinquished public guarantees, said the report examining investment measures in the principal developed and developing countries between November 2009 and May 2010.

"Several hundred financial firms thus continued to benefit from such public support and in non-financial sectors, at least 20,000 individual firms continued to benefit from emergency support programmes," it added.

Some of these measures however "threaten the flow of international investment," assessed the report.

"Although these measures are not, on the whole, overtly discriminatory toward foreign investors, they pose serious threats to market competition in general and to competition operating through international investment in particular," it added.

Kathryn Gordon from the OECD's investment division said the agencies are calling on G20 leaders, who are meeting later this month in Toronto, to ensure that these emergency measures are wound down.

"What we recommend to the G20 leaders, is that they ensure that all of these assets that they've acquired in the course of emergency measures are disposed of in a timely, non-discriminatory and open way," she said.

"We ask them to wind down their emergency measures in a prudent manner, but in an as rapid a manner as possible," she added.

© 2010 AFP

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