Sunday, August 14, 2011

World Bank chief Zoellick says markets in danger zone

World markets have entered a "new danger zone", the president of the World Bank has warned.

Robert Zoellick said investors had lost confidence in the economic leadership of several key countries.

Speaking at the Asia Society's annual dinner in Sydney, he also said that the global economy was going through a "multi-speed recovery".

Developing countries were now the source of growth and opportunity, Mr Zoellick said.

In the past two weeks, global stock markets have suffered massive falls on fears about the state of leading economies.

The US had its AAA debt rating cut for the first time in its history by the rating agency Standard & Poor's, following a long and bitter row in Congress over a plan to raise the US debt ceiling to ensure the country avoided a default.

In Europe, rumours emerged that France would also have its top-notch rating downgraded, although this was widely denied, while Italy announced its second austerity plan in as many months. (more)